insurance 1,400 licence plates 100 uired: Calculate the amount Mr. O. can deduct from employment income. Show al ilations
insurance 1,400 licence plates 100 uired: Calculate the amount Mr. O. can deduct from employment income. Show al ilations
Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations
Section: Chapter Questions
Problem 31P
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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
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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