CACC522-Week08-text

CACC522-Week08-text - CACC522Week08 Chapter8 Problems8

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CACC522-Week08 17:23 Chapter 8 Problems 8 Net income for tax purposes employment income capital gains etc. 1.  first step – what is gain on sale Home Cottage P of D 240000 175000 ACB (110000) (74000) Selling costs (10000) (1000) Gain 120000 100000 Gain / Year 17143 (120k / 7) 25000(100000/4) Exemption  (1+#yrs)/#yrs Ownedx  Gain (1+4)/7x120k = (85714) 1+3/4 x 100k= (100000) Capital Gain dispositions 34286 0 Taxable Capital Gain 17143 Home owned -2003-2009 – 7 years owned Cottage owned - 2006-2009 - 4 years owned cannot designate the cottage as principle residence from 2003-2005 Designate cottage for 4 years (1+3), only need to designate 3 years for cottage. don't allocate more years than needed to shelter capital gain +1 year – can own 2 properties in the year of move you can only designate 1 property per year as a  principle residence o use timelines to see overlapping years to see what can be used o Can only use 1 year for one property. If you designate the cottage as principle residence  in 2006-2009, the house can only be designated on the other years. 2. Employment income – 30k 3. Small Business corporation (SBC) All Corporations -> CCPC -> SBC – meet asset tests Company T Can have reserve since payments occur over 6 years T Ltd. P of D 63000 ACB 30000 CG 33000 Reserve lesser of 80% x Gain Lesser of
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33k x .8 or (63k – 9k) / 63k x 33  k 26400 or 28286 Reserve 26400 CG = CG - reserve 33k-26400 = 6600 x  ½ TCG 3300 Q Ltd. ABIL
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This note was uploaded on 04/14/2011 for the course ACC 522 taught by Professor A.vena during the Winter '11 term at Ryerson.

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CACC522-Week08-text - CACC522Week08 Chapter8 Problems8

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