Mr. Malcolm Miller has provided you with a list of various sources of income, deductions and credits for the purpose of determining his basic federal tax.
Inclusions:
His share of tax profit from a partnership business $10,000
Canadian bank interest 3,000
Retiring allowance from a former employer20,000
Gross salary from new employer60,000
Director's fee5,000
Taxable capital gains20,000
Taxable benefits from employment3,000
Rental income from a triplex25,000
Deductions, Losses, or Tax Credits:
Mortgage interest on triplex23,000
Canada Pension Plan contributions tax credit 346
Property taxes and insurance on triplex4,500
Non-capital losses from a previous year4,000
Allowable capital loss for this year2,000
Education and textbook tax credits transfer from son80
Net capital losses from a previous year5,000
Maintenance costs for triplex1,500
Contribution to employer's registered pension plan4,000
Basic personal and spousal tax credits 3,246
Fees to a professional engineering society300
Employment Insurance premiums tax credit126
Tuition tax credit for night course on computer applications68
Charitable gifts tax credit550
Canada employment tax credit164
- REQUIRED
(A) Determine the income, taxable income and basic federal tax based on the above correct information using the ordering rules in sections 3,111.1, and 118.92. Assume that federal tax before credits is $20,036 in 2012.
(B) Cross-reference each amount to the appropriate section of the Act.