Solution - Final Exam Review 2

Solution - Final Exam Review 2 - Indiviudal Tax Payer...

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Indiviudal Tax Payer Section 3(a) Net Employment Income   Spousal Support Annuity Income Universal Child Care Benefit Taxable Dividends Section 3(b) Taxable Capital Gain On Viet Foods Ltd. Shares Section: 3© Moving Expenses Child Care Costs Net Income For Tax Purposes Taxable Income Taxable Income is calculated as follows: Net Income For Tax Purposes Home Relocation Loan Deduction [($25,000)(2%)(9/12)] Taxable Income Tax On First $40,970 Tax On Next $40,971 At 22 Percent Tax on balance $16,462 @ 29% Tax Before Credits Tax Credits: Basic Personal 10382 Eligible Dependant (Vera or Leo) 10382 Child [(2)($2,089)] 4202 Caregiver - Grandfather 4223 EI 747 CPP 2163 Canada Employment 1051 Medical Expenses (Note 9) 11179 Total Credit Base 44329 Rate 15% Dividend Tax Credit [(10/17)($170)] Federal Tax Payable Notes Taxable Capital Gain On Viet Foods Ltd. Shares Proceeds Of Disposition [(900)($6.10)] Tax Payable The required calculations here are as follows:
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Adjusted Cost Base (Note 5) Capital Gain Inclusion Rate Taxable Capital Gain Taxable Dividends On Viet Foods Ltd. Shares Dividends Received [(1,260)($0.30)] 378 Gross Up Of 44% 166 Taxable Dividends 544 Ms. Saigon And Her Children ($1,465 + $493 + $1,2 3203 Lesser Of $3,098 [(3%)($103,282)] And $2,024 Subtotal Grandfather - Lesser Of $10,000 And $12,234 [$12,473 - (3%)($7,950)] Medical Expense Tax Credit Base Corporate taxpayer Part A - Part I Tax Payable The Part I Tax Payable is calculated as follows: Base Amount Of Part I Tax [(38%)($245,000)] Federal Tax Abatement [(10%)($245,000)(91%)] Small Business Deduction (Note One) Additional Refundable Tax On Investment Income (Note Two) Foreign Non-Business Income Tax Credit (Equal To Amount Withheld) Foreign Business Income Tax Credit (Equal To Amount Withheld) Manufacturing And Processing Profits Deduction (Note Three) General Rate Reduction (Note Four) Part I Tax Payable Note one Given the assumption with regard to foreign tax credits, the small business deduction 1 Canadian Active Business Income ($123,000 + $78,000) 2 Taxable Income 245000 Deduct: [(10/3)($3,000)] Foreign Non-Business Tax Credit -10000 Note 5 The average per share cost of the Viet Foods shares is $5.42 {[(360)($5.00) + ($6.00)] ÷ 1,260}. This gives an adjusted cost base for the shares sold of $4,878 [(90 Note 9 The medical expenses eligible for the credit are as follows: There is a circular calculation involved in the calculation of foreign tax credits, the sm
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Solution - Final Exam Review 2 - Indiviudal Tax Payer...

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