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Unformatted text preview: -Knowledge of lifetime CGD is required, but the detailed calculation on pages 510-513 can be ignored LEC TURE 10 TAXABLE INCOME OF INDIVIDUALS- Chapter 11 –Pages 495-519 Division ‘”C” Deductions • Net Income for Tax Purposes (ie, Division B income ) is the essentially sum of :- Net employment income- Net business and property income- Taxable capital gains- Other sources of income- Other deductions from income • Taxable income results after Division C deductions Note: Differences exist between individuals and corporations regarding the claiming of Division C deductions . For individuals , the following Division C deductions are available:- 1.Employee Stock Option Deduction - ITA 110(1) (d) and (d.1)- 2.Loss Carry Over - ITA 111- 3.Lifetime Capital Gains Deduction - ITA110.6- 4.Deduction for Certain Payments (eg, Social Assistance) -ITA 110(1)(f) - 5.Lump-Sum payments- ITA 110.2;- 6.Home relocation loan interest deduction on $25,000 - ITA 110 (1)(j)- 7.Northern Residents Deduction - ITA 110.7 Division ‘”C” Deductions for Individuals : 1.Stock Option Deduction - ITA 110 (1) (d)- (continuation from Lecture 2&3-re. stock option benefits ) NOTE: Although the deferral of Stock Option Benefits due to exercising options on Publicly Traded Shares - ITA 7 (8) applies up to March 4, 2010, we will not be covering this topic • Stock options agreements allow, but do not require, the holder to purchase a specified number of shares for a specified period of time at a specified acquisition price. The option price, at the time of issue, is usually at or above the market price of the shares, thereby triggering no employee taxable benefit at issue date and a future 50% deduction against future taxable benefits when the options are exercised. Note : even if the option price is lower than FMV , there is no immediate tax impact at the grant date , however, there will be an impact when the option is exercised , as options granted at less than FMV will be denied the ITA 110(1)(d) 50% deduction against the reported employee benefit....
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This note was uploaded on 01/24/2011 for the course ACCO 330 taught by Professor Mastromonaco during the Fall '10 term at Concordia Canada.
- Fall '10