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Unformatted text preview: IN-CLASS PROBLEMSCCA AND ELIGIBLE CAPITAL PROPERTYPROBLEM 1The following individuals operated sole proprietorships or partnerships, or owned rental properties, during the current year. All have December 31 year-ends.REQUIRED:Calculate the optimal CCA each should claim in the current year.(a) Don’s business income was $22,000 before CCA. Maximum available CCA is $23,000. Don, 26, is single. He had no taxable income last year. The current year is his first year with business income.Don will lose his basic tax credit if it is not claimed in the year. Therefore, he should report business income after CCA of $10,527. He needs to claim $11,473. The remaining $11,527 is available for future years.(b) Germaine’s business income is $22,000 before CCA. Maximum available CCA is $23,000. Germaine also has employment income of $42,000. Germaine will want to claim maximum CCA of $23,000. This will create a business loss of $1,000. As a result, her taxable income will be $41,000. (Note that, unlike Don above, of $1,000....
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- Spring '11
- Taxation in the United States, CCA