Other_Income,_Attribution,_Related,_etc_-_student_Nov_10.

Other_Income,_Attribution,_Related,_etc_-_student_Nov_10. -...

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Unformatted text preview: 1 Principal Residence Principal Residence Reduction Formula [ITA 40(2)(b)] : 1 + # Yrs. Designated Principal Residence X Gain Number of Years Owned 2 Principle Residence Principle Residence Must designate as such in year of disposal. If surrounding land greater than 1/2 hectare, additional land must be shown to be necessary to taxpayers use & enjoyment. Only one property can be designated for a particular year after 1981 by the family unit (taxpayer, spouse & minor children). 3 Principle Residence Exemption Principle Residence Exemption Property Years Owned Gain Gain Per Year House 2001-2010 $90,000 $90,000/10 = 10 = $9,000 Cottage 2006-2010 $100,000 $100,000/5 = 5 =$20,000 Q: What is the minimum gain to report? 4 Principle Residence Exemption Principle Residence Exemption Property Designate Gain to Report House 2001-2006 $90,000-(1+ 6)/10 x 90,000 = $27,000 x = $13,500 Cottage 2007-2010 $100,000-(1+4)/5 x100,000 = NO GAIN $190,000-13,500 = $176,500 is tax free! 5 Other Income Other Income 6 Overview of Course to Date Overview of Course to Date Employment (Lectures 2-3) Business (Lecture 4) Property (Lecture 6) Other Income s.3(a) Income from all sources s.3(b) +Taxable capital gains (Lectures 6 & 7) s.3(c)- subdivision e deductions s.3(d) - Loss from employ, bus, prop, ABIL Division B net income-Division C deductions Taxable Income 7 Other Income Other Income 56(1)(a) 56(1)(a) Pension from employer (i.e. RPP) Pension from employer (i.e. RPP) Old Age Security (OAS) Old Age Security (OAS) Canada Pension Plan Payments Canada Pension Plan Payments Retiring allowances Retiring allowances Unemployment insurance payments Unemployment insurance payments 8 Other Income Other Income 56(1)(b) Support payments: 56(1)(b) Support payments: Spousal Spousal support (taxable/deductible) support (taxable/deductible) Periodic payments Periodic payments Discretionary use (mortgage, property tax) Discretionary use (mortgage, property tax) Apart when payment made Apart when payment made 56.1 - 3 56.1 - 3 rd rd party payments party payments Child Child support NOT (taxable/deductible) if support NOT (taxable/deductible) if support agreement signed or changed after support agreement signed or changed after April 30, 1997....
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Other_Income,_Attribution,_Related,_etc_-_student_Nov_10. -...

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