question archive Minnie lends her spouse $200,000 to invest in a business of his own - Mike's Car Detailing
Minnie lends her spouse $200,000 to invest in a business of his own - Mike's Car Detailing
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Minnie lends her spouse $200,000 to invest in a business of his own - Mike's Car Detailing. Mike sets up shop as a sole proprietor, The business does well. In its first year of operations its net profit is $28,000, Given these circumstances, what are the tax implications for Minnie? a) She will need to claim $28,000 on her tax return as this income is considered property income. @ b) She will need to claim $14,000 on her tax return as these are capital gains. 9) Minnie does not have to claim any of the $28,000 in profits on her tax return as this Income Is considered active business income. (@ d) Minnie does not have to claim any of this income on her tax return as it will be added to CNIL.Minnie lends her spouse $200,000 to invest in a business of his own - Mike's Car Detailing. Mike sets up shop as a sole proprietor, The business does well. In its first year of operations its net profit is $28,000, Given these circumstances, what are the tax implications for Minnie? a) She will need to claim $28,000 on her tax return as this income is considered property income. @ b) She will need to claim $14,000 on her tax return as these are capital gains. 9) Minnie does not have to claim any of the $28,000 in profits on her tax return as this Income Is considered active business income. (@ d) Minnie does not have to claim any of this income on her tax return as it will be added to CNIL.
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The correct answer is;
c) Minnie does not have to claim any of the $28,000 in profits on her tax return as this income is considered active business income.
Step-by-step explanation
The amount of $28,000 is considered an active business income and therefore it will not be claimed by Minnie on her tax returns. It is more of a business connected to her husband than her and therefore she cannot claim.
