CTP13_Chapter_04

Year plus 100 25 of taxable capital gains on gifts

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Unformatted text preview: an Tax Principles Charitable Donations – ITA 118.1 • General Rules – Carry Forward: 5 Years – Subject to the same limitations Copyright © 2014, Clarence Byrd Inc. 32 Canadian Tax Principles Medical Expenses – ITA 118.2 • General Rules – 15% of eligible costs – Reduced by the lesser of • 3% of Net Income • $2,152 (3%)($71,733) – Any 12 month period ending in the year Copyright © 2014, Clarence Byrd Inc. 33 Canadian Tax Principles Medical Expenses – ITA 118.2 • • Spouse And Minor Dependants – No Additional Reduction Dependants Over 17 Years Of Age – Calculated For Each Dependant – Each Dependant’s Medical Expenses, Reduced By The Lesser Medical Of: Of: • $2,152 • 3% Of dependant’s Net Income Copyright © 2014, Clarence Byrd Inc. 34 Canadian Tax Principles Medical Expenses – ITA 118.2 Example: An individual with income > $100,000 and medical expenses of $2,500. His Example: 20 year old child has medical expenses of $10,000 and net income of $9,000. 20 Taxpayer’s Expenses Threshold Subtotal Dependant Expenses - $10,000 Reduced By Lesser Of: Dependant • (3%)($9,000) = $270 • $2,152 Allowable Amount Of Medical Expenses $ 2,500 ( 2,152) $ 348 348 Credit (15%) $ 1,512 Copyright © 2014, Clarence Byrd Inc. 9,730 $ 10,078 35 Canadian Tax Principles Refundable Medical Expense Refundable Supplement – ITA 122.51 Supplement • Qualifying – Age 18 or over – Earned income > $3,333 Copyright © 2014, Clarence Byrd Inc. 36 Canadian Tax Principles Refundable Medical Expense Refundable Supplement – ITA 122.51 Supplement • Refundable Supplement – Lesser of: • $1,142 • 25/15 Of The Medical Expense Tax Credit Then Reduced By 5% Of Family Income > $25,278 Copyright © 2014, Clarence Byrd Inc. 37 Canadian Tax Principles Refundable Medical Expense Refundable Supplement – ITA 122.51 Supplement • Refundable Supplement Example Ms. Forbes has medical expenses of $3,500 and earned income of Ms. $22,000. $22,000. – Medical Expense Credit = $426 [(15%)($3,500 - $660)] – [(25/15)($426)] = $710 – Refundable amount = $710, less Nil [(5%)($22,000 - $25,278)] Refundable = $710 $710 Copyright © 2014, Clarence Byrd Inc. 38 Canadian Tax Principles Disability Amount – ITA 118.3 – Must Be Severe And Prolonged • Significantly Restricts Basic Living Activities • A Continuous Period Of At Least 12 Months – Requires Form T2201 Copyright © 2014, Clarence Byrd Inc. 39 Canadian Tax Principles Disability Amount – ITA 118.3 – 15% Of $7,697 = $1,155, No Income Test – No Claim If: • More Than $10,000 For Full Time Attendant Care Or More • Costs Of Nursing Home Are Claimed – Can Be Transferred To Individual Can Making Claim Under ITA 118(b), (c.1) Or (d) Making Copyright © 2014, Clarence Byrd Inc. 40 Canadian Tax Principles Disability Supplement • If under 18 at end of year: – 15% Of $4,490 = $674 – Combined Provides $1,828 [(15%)($7,697 + $4,490)] – The $4,490 is reduced by • Child...
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