In 2023, Sophie had employment income of $95,000 from a large Canadian public company that has...
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In 2023, Sophie had employment income of $95,000 from a large Canadian public company that has annual gross revenue of $600 million. She is granted access to a stock option plan in November 2022 where she can acquire 15,000 shares of the company for $25 each beginning in 2023. The FMV of the shares at the time of the stock option plan is granted is $20 each. Sophie purchases all 15,000 shares of the stock option plan for $25 in March 2023 when the shares are trading for $28. Sophie then sells all of the shares for $30 in February 2024. In addition, she had the following income in 2023. Interest income $2,500 Taxable capital gain (not from option stocks) $12,000 Sole-proprietorship business income $25,000 Unrestricted farming income $9,000 Limited partnership income $5,000 Sophie approached to you for tax advises. After interviewing her, you explored that she had some loss carry forward balances from 2022 as follows: Loss carry forward balances on December 31, 2022 Taxable capital loss Sole-proprietorship business loss Allowable business investment loss (ABIL) Unrestricted farming loss $14,000 $35,000 $12,000 $11,000 $7,500 Limited partnership loss She has a basic personal amount (BPA) credit of $15,000. She donated $1,500 in 2023. Required: a. Calculate net income for 2023. b. Show the breakdown of Division C deductions for 2023. c. Calculate taxable income for 2023. d. Show the carry forward balance at the end of 2023. e. Calculate tax payable. In 2023, Sophie had employment income of $95,000 from a large Canadian public company that has annual gross revenue of $600 million. She is granted access to a stock option plan in November 2022 where she can acquire 15,000 shares of the company for $25 each beginning in 2023. The FMV of the shares at the time of the stock option plan is granted is $20 each. Sophie purchases all 15,000 shares of the stock option plan for $25 in March 2023 when the shares are trading for $28. Sophie then sells all of the shares for $30 in February 2024. In addition, she had the following income in 2023. Interest income $2,500 Taxable capital gain (not from option stocks) $12,000 Sole-proprietorship business income $25,000 Unrestricted farming income $9,000 Limited partnership income $5,000 Sophie approached to you for tax advises. After interviewing her, you explored that she had some loss carry forward balances from 2022 as follows: Loss carry forward balances on December 31, 2022 Taxable capital loss Sole-proprietorship business loss Allowable business investment loss (ABIL) Unrestricted farming loss $14,000 $35,000 $12,000 $11,000 $7,500 Limited partnership loss She has a basic personal amount (BPA) credit of $15,000. She donated $1,500 in 2023. Required: a. Calculate net income for 2023. b. Show the breakdown of Division C deductions for 2023. c. Calculate taxable income for 2023. d. Show the carry forward balance at the end of 2023. e. Calculate tax payable.
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a Calculate Net Income for 2023 Sophies net income for 2023 includes Employment income 95000 Interes... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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