question archive Financial information relating to the 2020 taxation year of George is outlined below: Directors fees received for being on the board of directors of a Canadian public corporation $40,000 Gain on sale of land that was acquired in 1996, on which Sam intended to construct a vacation home
Subject:AccountingPrice:2.87 Bought7
Financial information relating to the 2020 taxation year of George is outlined below:
Required
In accordance with the format and categories specified in section 3 of the Income Tax Act,
determine Sam’s net income for tax purposes for the 2020 taxation year. Explain any loss carry-forwards you may have.
Answer:
Income from Salary
Director's fess: 40000
Income from House Property
Rental Loss: (40000)
Income from Capital Gains/ Losses
Gain on sale of land
Sale Consideration: year 2020: 182000
Indexed cost of Acquisition: year 1996: 289*170000/100= 170000
Gain on sale of land: 12000
Gain on sale of condominium: 75000
Loss on sale of shares: 9000
Income from Other Sources
Withdrawal of RRSP: 10000
Dividend :900
Total Gross Income 97900
* Loss on rental income set off from salary income
* loss of Sale of share to be carry forward
Less: Non Taxable Incomes:
Withdrawals from RRSP 10000
Dividend 900
Total 19000
Net Income 78900
Carry forward loss on sale of share-9000