question archive The following four situations are independent
The following four situations are independent
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The following four situations are independent.
Required:
Provide a brief and specific answer to the questions posed.
- Sly Don passed away on April 1, 2011. He had been a sole practitioner of tax in a public accounting practice until the date of his death. At that date, he had not filed his personal income tax return for 2010 and certainly not for 2011. What is the filing deadline for:
- the 2010 return?
- the 2011 return?
- Ms. JSK is a sole practitioner in public accounting practice. The fiscal year-end of her practice is December 31. Her only source of income is from the practice, which is expected to generate net income of $80,000 in fiscal 2011. She expects to pay $21,000 in tax in respect of 2011. She paid $13,200 in tax in respect of 2010 and $12,900 in tax in respect of 2009.
Provide Ms. JSK with a schedule indicating the date and the calculation of the minimum amount of each instalment that she is required to pay in respect of 2011.
- RFL Inc., a Canadian-controlled private corporation, has a July 31 year-end. It is not associated with any other corporation. Its tax manager has estimated its 2011 federal income tax liability at $48,000 on taxable income estimated to be $250,000. Its federal income tax liability for 2010 was $24,000 on taxable income of $187,000, and its federal income tax liability for 2009 was $18,000 on taxable income of $140,000. RFL Inc does not have a “perfect compliance history” when it comes to paying quarterly instalments.
- Provide the tax manager with a schedule indicating the date and minimum amount of each instalment that the corporation is required to pay in respect of its 2011 taxation year.
-
- When must the final balance of federal income tax be paid for the 2011 taxation year? Specify the conditions to permit that date.
-
- What is the filing deadline for the 2011 income tax return of the corporation?
- Mr. ARFL filed his 2010 personal income tax return on March 10, 2011. He received a Notice of Assessment on May 9, 2011, disallowing a tax credit in respect of tuition paid to the University of Pennsylvania. The Notice of Assessment had been mailed May 3, 2011.
What is the filing deadline for a Notice of Objection, if he wished to dispute the issue? Specify the options for this deadline.
The following four situations are independent.
Required:
Provide a brief and specific answer to the questions posed.
- Sly Don passed away on April 1, 2011. He had been a sole practitioner of tax in a public accounting practice until the date of his death. At that date, he had not filed his personal income tax return for 2010 and certainly not for 2011. What is the filing deadline for:
- the 2010 return?
- the 2011 return?
- Ms. JSK is a sole practitioner in public accounting practice. The fiscal year-end of her practice is December 31. Her only source of income is from the practice, which is expected to generate net income of $80,000 in fiscal 2011. She expects to pay $21,000 in tax in respect of 2011. She paid $13,200 in tax in respect of 2010 and $12,900 in tax in respect of 2009.
Provide Ms. JSK with a schedule indicating the date and the calculation of the minimum amount of each instalment that she is required to pay in respect of 2011.
- RFL Inc., a Canadian-controlled private corporation, has a July 31 year-end. It is not associated with any other corporation. Its tax manager has estimated its 2011 federal income tax liability at $48,000 on taxable income estimated to be $250,000. Its federal income tax liability for 2010 was $24,000 on taxable income of $187,000, and its federal income tax liability for 2009 was $18,000 on taxable income of $140,000. RFL Inc does not have a “perfect compliance history” when it comes to paying quarterly instalments.
- Provide the tax manager with a schedule indicating the date and minimum amount of each instalment that the corporation is required to pay in respect of its 2011 taxation year.
-
- When must the final balance of federal income tax be paid for the 2011 taxation year? Specify the conditions to permit that date.
-
- What is the filing deadline for the 2011 income tax return of the corporation?
- Mr. ARFL filed his 2010 personal income tax return on March 10, 2011. He received a Notice of Assessment on May 9, 2011, disallowing a tax credit in respect of tuition paid to the University of Pennsylvania. The Notice of Assessment had been mailed May 3, 2011.
What is the filing deadline for a Notice of Objection, if he wished to dispute the issue? Specify the options for this deadline.
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Answer:
- (i) October 1, 2011, i.e., six month after the date of death, in this case
- June 15, 2012
- Ms. JSK should pay quarterly instalments in 2011 as follows:
|
March 15: |
¼ × $12,900 |
$3,225 |
|
June 15 |
¼ × $12,900 |
3,225 |
|
September 15 |
½ × ($13,200 − (2 × $3,225)) |
3,375 |
|
December 15 |
½ × ($13,200 − (2 × $3,225)) |
3,373 |
- (i) RFL Inc. should pay the following instalments in its 2011 taxation year: August 31 and September 30, 2010
1/12 × $18,000 $1,500
Last day of each of October 2010 to July 2011
1/10 × ($24,000 – (2 × $1,500)) $2,100
-
- Where a small business deduction is claimed and taxable income for the preceding year was less than $500,000, the balance of tax in respect of the 2011 taxation year is due on October 31, 2011, i.e., three months after the taxation year-end.
-
- January 31, 2012, i.e., six months after the 2011 year-end.
- The deadline for a Notice of Objection to be filed by an individual is the later of:
- April 30, 2012, i.e., one year after the filing-due day of the tax return for the year, and
- August 1, 2011, i.e., 90 days after mailing the Notice of Assessment.
