insurance 1,400 licence plates 100 uired: Calculate the amount Mr. O. can deduct from employment income. Show al ilations

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations
Section: Chapter Questions
Problem 31P
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Part 1 (ITA 3)
Division B Net Income to Division C Taxable Income to Taxes Payable for Individuals
ITA 3(a)
+ Bin # 1- Net Employment - losses carry forward 20 years and carry back 3 years (carrying baskets)
+ Bin # 2 - Net Business & Property – losses carry forward 20 years and carry back 3 years (carrying baskets)
+ Bin # 4 – Other Income
ITА 3 (b)
+ Bin # 3 – Net Capital - losses carry forward for infinity and carry back 3 years (carrying basket)
ITА 3 (c)
Bin # 5 - Other Deductions
= Sources of Income
ITА З (d)
Losses in current year from Bins 1, 2, 4
= Division B Net Income
Equivalent to Capital Gains Deduction for Employee Stock Options
ITA 110
Payments included to calculation Division B but not included for Division C (e.g. social assistance)
Losses from other years (carrying baskets Bin #1 & 2)
ITA 111
Losses from other years (carrying basket Bin #3 limited to Net Capital Income included in ITA 3 (b))
= Division C Taxable Income
x Applicable Tax Rates
ΙΤΑ 118
Tax Credits
= Division E Taxes Payable for Individuals
Transcribed Image Text:Part 1 (ITA 3) Division B Net Income to Division C Taxable Income to Taxes Payable for Individuals ITA 3(a) + Bin # 1- Net Employment - losses carry forward 20 years and carry back 3 years (carrying baskets) + Bin # 2 - Net Business & Property – losses carry forward 20 years and carry back 3 years (carrying baskets) + Bin # 4 – Other Income ITА 3 (b) + Bin # 3 – Net Capital - losses carry forward for infinity and carry back 3 years (carrying basket) ITА 3 (c) Bin # 5 - Other Deductions = Sources of Income ITА З (d) Losses in current year from Bins 1, 2, 4 = Division B Net Income Equivalent to Capital Gains Deduction for Employee Stock Options ITA 110 Payments included to calculation Division B but not included for Division C (e.g. social assistance) Losses from other years (carrying baskets Bin #1 & 2) ITA 111 Losses from other years (carrying basket Bin #3 limited to Net Capital Income included in ITA 3 (b)) = Division C Taxable Income x Applicable Tax Rates ΙΤΑ 118 Tax Credits = Division E Taxes Payable for Individuals
Mr. O's employer requires him to use his own vehicle for work and pay all of the
vehicle's operating costs. Mr. O. is not paid commissions.
Mr. O. purchased a vehicle on July 1, 2020 for $37,290 including HST. Mr. O. drove this
vehicle 25,000 kilometers, of which 15,000 were for work. The capital cost allowance for
2020 is $15,255. During the 6 months he owned vehicle he paid:
bank loan interest $1,950
gas and oil
maintenance
insurance
1,840
300
1,400
100
licence plates
Required: Calculate the amount Mr. O. can deduct from employment income. Show all
calculations.
Transcribed Image Text:Mr. O's employer requires him to use his own vehicle for work and pay all of the vehicle's operating costs. Mr. O. is not paid commissions. Mr. O. purchased a vehicle on July 1, 2020 for $37,290 including HST. Mr. O. drove this vehicle 25,000 kilometers, of which 15,000 were for work. The capital cost allowance for 2020 is $15,255. During the 6 months he owned vehicle he paid: bank loan interest $1,950 gas and oil maintenance insurance 1,840 300 1,400 100 licence plates Required: Calculate the amount Mr. O. can deduct from employment income. Show all calculations.
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