Taxation 1

1745 Words7 Pages
Taxation 1 – Assignment 1 Q1) 1-7 Net Income for Tax Purposes Case A: Income Under ITA 3(a) Employment Income $46,200 Business Income $13,500 Property Loss (see ITA 3(d) below) NIL $59,700 Income Under ITA 3(b) Taxable Capital Gains $14,320 Allowable Capital Losses ($23,460) NIL Balance from ITA 3(a) And (b) $59,700 Subdivision e deductions ($4,800) Balance under ITA 3(c) $54,900 Deduction Under ITA 3(d): Property Loss ($2,350) Net Income for Tax Purposes (Division B Income) $52,550 As the Gambling winnings and losses related to an occasional gambling habit, the income is non-taxable and the losses non-deductible. There will be an allowable…show more content…
Note Five: Other items and reasons for their exclusion would be as follows: Any income tax withheld is not deductible CPP contributions, EI premiums, and United Way contributions create credits against taxes payable, but are not deductible in the determination of employment income. Reimbursement for the accounting course tuition is not a taxable benefit as the course is related to the employee’s line of work and the employer is the beneficiary of the additional training. Q4) 4-1 Tax Credits Jack Brown maximum amount of 2012 personal tax credits is: $3,309.30 Personal Tax Credit Federal 10,822 Spousal Credit (10,822-7,250) 3,572 Dependant Child (2,191 *3) 6,573 Canada Employment tax credit 1,095 Total Credits 22,062 Total Taxable credits (22,062 * 15%) 3,309.30 Marion Barkin maximum amount of 2012 personal tax credits is: $4,232.55 Personal Tax Credit Federal 10,822 Equivalent to Spouse 10,822 Dependant Children (2191*3) 6,573 Total Credits 28,217 Total Taxable credits (28,217 * 15%) 4,232.55 There is no reduction to the dependent children deduction for income earned by the children. There is also no deduction to the Equivalent to spouse in this example as 2 of the children have nil income and they can be
Open Document