Assignment 1 TAXX301

Assignment # 1 by Asad Iqbal TAXX301

Question # 1
ONE – 7 P34
CASE A:
Income Under ITA 3(a)
Employment Income $46,200
Business Income 13,500 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 (Spousal Payments) (4,800)
Balance Under ITA 3© 54,900
Deduction Under ITA 3(d) (2,350)
Net Income for Tax Purposes (Division B Income) $52,550
Christina has Allowable Capital Losses carry over of (9,140) that would be available at the end of the current year.
CASE B:
Income Under ITA 3(a)
Employment Income $64,000
Interest Income 2,600
Rental Income 4,560 71,160
Income Under ITA 3(b)
Taxable Capital Gains 32,420
Allowable Capital Losses (29,375) 3,045
Balance From ITA 3(a) And (b) 74,205
Subdivision e Deductions (RRSP Deductions) (12,480)
Balance Under ITA 3© 61,725
Deduction Under ITA 3(d) (Business loss 144,940*0.5) (72,470)
Net Income for Tax Purposes (Division B Income) Nil
Christina has Business loss carry over of 10,745 that would be available at the end of the current year.

Question # 2 TWO-3 P69
CASE ONE:
2010 Tax owing: 13,500 – 11,200 = 2,300
2011 Tax owing: 16,200 – 12,900 = 3,300
2012 Tax owing: 18,400 – 15,100 = 3,300
Instalments are required because 2012 owing is more than 3000 and 2011 owing are also more than 3000. Instalments are due on March 15, June 15, September 15, and December 15.
There are 3 alternatives, and the total instalments are same in each alternative. Though basing first two installments on 2010 will have lower first 2 instalments.
March 15 (2300/4) = 575
June 15 = 575 September 15 = (3,300-1150)/2 = 1,075
December 15 = 1,075

CASE TWO:
2010 Tax owing: 13,500 – 9,200 = 4,300
2011 Tax owing: 16,200 – 10,300 = 5,900
2012 Tax owing: 18,400 – 14,900 = 3,500
Instalments are due on March 15, June 15, September 15, and December 15.
Instalments are required