Question 1

20x3
3(a) Business Income 54,000
Dividend Income 42,500
96,500
3(b) Taxable Capital Gain 11,000
Allowable Capital Loss - 2,000 9,000

3(d) Business Loss -

Allowable Business Investment Loss - 3,750
NIFTP 101,750

Division C Deductions
Dividends - 42,500
Donations - 23,000
Net Captial Loss C/O - 9,000
Non Captial Loss C/O carryback from 20x5 - 27,250
Taxable Income 27,250 becomes 0 -
Donation C/O -
Net Captial Loss C/O
Beg. 9,000
+Created -
-Used - 9,000
End. -
ABIL C/O
Beg. 3,750
+Created -
-Used - 3,750
End. -
Non Captial Loss C/O
+3(d) Losses
+Net Captial Loss deducted in Div C
+Dividends deducted in Div C
-(3(a)+3(b))
-
 20x4 20x5
32,000 -
22,500 18,000
54,500 18,000
2,500 5,000
- 4,500 - - 3,500 1,500
2,000
Add to Net Captial Loss C/O
- - 75,000
- -
54,500 can't take Div C -

- 22,500 -
- 9,000 -
- -
carryback from 20x5 - 23,000 -
23,000 becomes 0 - -
- 3,000

- 2,000
2,000 -
- - 1,500
2,000 500

- -
- -
- -
- -

75,000
1,500
18,000
- 19,500
- 75,000
carry back 3 years
75,000-27,250-23,000
= 24,750 carryforward to 20x6
 20x6
62,500
10,500
73,000
9,000
- 9,000

-
-
82,000

- 10,500
3,000 C/O+13,000 CY - 16,000 Donations < 75% of NIFTPs
- 500
- 24,750
30,250
-

500

- 500
-

-
-
-
-

24,750
- 24,750

-
No amount available for carryforward to 20x7
Question 2
3(a) Business Income
Property Income
Interest 45,000
Dividends 18,750
3(b) Taxable Capital Gain 37,500
Allowable Capital Losses 0
NIFTP

Taxable Income
NIFTP
Division C Deductions
Donations
Dividends
Non-capital Loss C/O
Net-capital Loss C/O
Taxable Income

Available for Small Business Deduction (18%)

Lessor of
ABI 85,000
Tax Income 90,000
Limit 500,000

Aggregate Investment Income

Net Taxable Capital Gain 37,500
- Net Capital Loss C/O in Division C (37,500)
+ Interest Income 45,000
45,000

Available for General Rate Deduction (13%)

Taxable Income - SBD amount - M&P amount- All
amount - PSB amount
90,000 - 85,000 - 45,000 = -45,000 0

Ordinary Part I Tax Payable

Basic Rate (Taxable Income x Rate) 90,000 x 38%
- Federal Tax Abatement (Taxable Income x Rate) 90,000 x 10%
- Small Business Deduction (SBD amount x Rate) 85,000 x 18%
- M&P Deduction
- General Rate Deduction

Additional Refundable Tax (ART) (10 2/3%)

Lessor of:
All 45,000
 Excess of Taxable Income over SBD (90,000-85,000) 5,000 x 10 2/3%
Total Part I Tax

Part IV Tax
Portfolio Dividend x Rate 18,750 x 38 1/3%

Refundable Part I Tax (30 2/3%)

Lessor of:
AII 45,000 x 30 2/3%
Excess of Tax Income over SBD 5000 x 30 2/3%
Part I Tax Payable

RDTOH Balance
Beginning Balance 0
Less: PY Dividend Refund 0
Add: Refundable Part I Tax 1,533
Add: Refundable Part IV Tax 7,187
Ending Balance 8,721

Dividend Refund
Lessor of :
Dividend paid x Rate 112,500 x 38 1/3% 43,125
RDTOH Account 8,721

Total Tax
Part I Tax (including ART) 10,433
Part IV Tax 7,187
Less: dividend refund (8,721)
Total Federal Tax 8,900
Provincial Tax 6,400
Total Tax Payable 15,300
 85,000

63,750

37,500
186,250

0 Net Captial Loss C/O Non Captial Loss C/O

(18,750) Beg. 52,000 Beg. 40,000
(40,000) +Created +Created
(37,500) -Used (37,500) -Used (40,000)
90,000 End. 14,500 End. 0

SBD

AII

34,200
(9,000)
(15,300)
0
0
9,900 Ordinary Part I
 533 ART
10,433

7,187

13,800
1,533 Refundable Part I Tax
10,433

Dividend Refund