3

Briefly explain the difference between a tax deduction and a tax credit

 4

The FG Company had Net Income For Tax Purposes for the current year ending December 31, of $262,336
This amount included $11,791 in taxable capital gains, as well as $13,918 in dividends received from taxable Canadian corporations. Also during the current year, the Company made donations to registered charities of $8,613.
At the beginning of the year, the Company had available a non-capital loss carry forward of $61,779, as well as a net capital loss carry forward of $17,532.

Determine the Company’s minimum Taxable Income for the current year ending December 31, and the amount and type of any carry forwards available at the end of the year.

Show all of your work and provide all explanations on your "working paper" which will be submitted using the link on blackboard learn. Enter the taxable income below without dollar signs, commas or decimals.

 5

Renee Zhang has taxable income of $242,357 for the 2020 taxation year. Calculate the federal taxes payable for Renee assuming that she only receives the basic personal tax credit.

 7

Even though she is a student who only works part-time, Kimberly likes to make charitable donations to several organizations each year. During the current year, she made donations to the following organizations:
- Cancer Society (charity): $1,000
- United Way (charity): $550
- Stollery Children’s Hospital (charity): $600
- Ronald McDonald House (charity): $1,750
- Federal Green Party (political party): $550

Kimberly’s net income in the current year was $5,000. Which of the following is the correct charitable donation credit for Kimberly in the current taxation year?

$1,060

$1,291

$1,030

$1,073

$1,103

Question 9

Sarah Smith would like to claim the eligible dependent credit. Which of the following statements is INCORRECT in regards to this credit?

A divorced single parent, with a child (or children) under 18 qualifies for this credit

The maximum amount of the Eligible Dependent Credit is reduced by the Net Income earned in the year by the eligible dependant.

A married parent, living with her spouse, with children under 18, qualifies for this credit

If a single parent has two children under 18, she can elect to claim either one of the children as an eligible dependant each year

Ottawa Corporation has gross business revenues for the year ended October 31, 2019 of $165,500. In addition, the corporation incurred the following expenses during the year:

Meals and entertainment expenses: $ 38,000
Amortization and depreciation: $ 69,000
Landscaping costs: $ 32,000
Charitable donations: $ 2,500

You have correctly determined CCA to be $61,000. The corporation also received dividends (income) from other taxable Canadian corporations of $52,000 during the year (this amount is not included in the business revenues noted above). What are the correct amounts for first, Net Income for Tax Purposes, and second, Taxable Income?

		Net Income for Tax Purposes: $103,000; Taxable Income: $51,000.
		Net Income for Tax Purposes: $73,500; Taxable Income: $19,000.
		Net Income for Tax Purposes: $105,500; Taxable Income: $51,000.
		Net Income for Tax Purposes: $21,500; Taxable Income: $19,000.

Answer rating: 100% (QA)

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