12. Mr. Arnold is the sole proprietor of a dance studio. It has a year end...
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12. Mr. Arnold is the sole proprietor of a dance studio. It has a year end of December 31 and it started business on June 1, 2017. He had the following receipts and disbursements related to the school: Tuition fees billed and received Tuition fees to be billed Rent on studio Purchase of stereo and karaoke system Donation to the Cancer Society 2 day convention to Jasper - meals included Purchase of 12 chairs for the change room $15,000 500 (2,400) (3,500) (100) (800) (1,200) 13. In 2017, Allen paid $350 a month for child care and $2,500 for hockey lessons for his 7 year old daughter. His former spouse paid him $400 a month in child support pursuant to a written agreement upon their separation on January 01, 2017. In addition Allen's former spouse also paid $400 per month in spousal support. At year end Allen received $6,000 in total for child support and spousal support. 14. On February 12, 2017 he purchased 2,000 shares of BRX, a Canadian public corporation for $5.50 per share. Allen purchased another 100 shares on March 5, 2017 at $4.85 a share. On April 1x the company paid out a stock dividend of 10%, which resulted in an increase in the paid up capital of $4.00 for each share issued. He sold 1,200 shares on July 15, 2017 at $4.00 a share. On August 10, 2017 he purchased 250 shares at a price of $4.25 a share. At the end of the year he still owns these shares. 15. Allen's 2016 income tax return indicates the following tax balances: a) $5,000 of interest from the GIC noted in point 11 were reported. b) Allen's 2016 earned income was $64,000 and her pension adjustment amount was $4,500. She did not have any unused contribution room carry forward. A non-capital loss carry forward of $18,000 from 2009 was available. d) A net-capital loss carry forward resulting from 2011 in the amount of $20,000, and $20,000 from 2016. e) Charitable donations of $1,200 from 2016 were not deducted. f) Capital gains reserve was $70,000 in 2016 (capital gains reserve in 2017 is $40,000). Required: Calculate Allen's 2017: 1. Net employment income 2. Net property income 3. Net business income 4. Net other income 5. Net Taxable capital gains 6. Total income 7. Other deductions 8. Net income for tax purposes 9. Taxable income 12. Mr. Arnold is the sole proprietor of a dance studio. It has a year end of December 31 and it started business on June 1, 2017. He had the following receipts and disbursements related to the school: Tuition fees billed and received Tuition fees to be billed Rent on studio Purchase of stereo and karaoke system Donation to the Cancer Society 2 day convention to Jasper - meals included Purchase of 12 chairs for the change room $15,000 500 (2,400) (3,500) (100) (800) (1,200) 13. In 2017, Allen paid $350 a month for child care and $2,500 for hockey lessons for his 7 year old daughter. His former spouse paid him $400 a month in child support pursuant to a written agreement upon their separation on January 01, 2017. In addition Allen's former spouse also paid $400 per month in spousal support. At year end Allen received $6,000 in total for child support and spousal support. 14. On February 12, 2017 he purchased 2,000 shares of BRX, a Canadian public corporation for $5.50 per share. Allen purchased another 100 shares on March 5, 2017 at $4.85 a share. On April 1x the company paid out a stock dividend of 10%, which resulted in an increase in the paid up capital of $4.00 for each share issued. He sold 1,200 shares on July 15, 2017 at $4.00 a share. On August 10, 2017 he purchased 250 shares at a price of $4.25 a share. At the end of the year he still owns these shares. 15. Allen's 2016 income tax return indicates the following tax balances: a) $5,000 of interest from the GIC noted in point 11 were reported. b) Allen's 2016 earned income was $64,000 and her pension adjustment amount was $4,500. She did not have any unused contribution room carry forward. A non-capital loss carry forward of $18,000 from 2009 was available. d) A net-capital loss carry forward resulting from 2011 in the amount of $20,000, and $20,000 from 2016. e) Charitable donations of $1,200 from 2016 were not deducted. f) Capital gains reserve was $70,000 in 2016 (capital gains reserve in 2017 is $40,000). Required: Calculate Allen's 2017: 1. Net employment income 2. Net property income 3. Net business income 4. Net other income 5. Net Taxable capital gains 6. Total income 7. Other deductions 8. Net income for tax purposes 9. Taxable income
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Answer rating: 100% (QA)
Solution To calculate Allens 2017 taxable income we need to consider the following factors 1 Net employment income Allens 2017 earned income was 64000 ... View the full answer
Related Book For
South Western Federal Taxation 2018 Essentials Of Taxation Individuals And Business Entities
ISBN: 9781337386173
21st Edition
Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
Posted Date:
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