Ahmed also advises you that he sold a piece of vacant land at a significant loss this
Question:
Ahmed also advises you that he sold a piece of vacant land at a significant loss this year. He had planned to build a rental property on the land but learned after purchasing it that it was highly polluted. The cost of this land was $200,000, and it was sold for $30,000 in 2019.
4.
Ahmed has a T5 slip from 2019 indicating that he earned an eligible dividend of $20,000 and interest income of $300.
5.
For the 2019 taxation year, Ahmed made RRSP contributions of $3,000. This is his first RRSP contribution, and his RRSP deduction limit for 2019 is $120,000.
6. Ahmed pays spousal support payments to his ex-wife of $500 per month pursuant to a legal agreement. He is behind in his payments and was only able to pay $3,500 in 2019.
Required: a)
Calculate the following for the 2019 taxation year. Provide explanations for omitted amounts.
i) Ahmed’s rental income and any taxable capital gains and allowable capital losses from the sale of the real estate properties that he sold during 2019 (4.5 marks)
ii) Ahmed’s deductible moving expenses (4.5 marks)
b) Calculate net income for tax purposes for Ahmed for 2019. (6.5 marks)
c) Determine Ahmed’s estimated RRSP deduction limit for 2020. (4.5 marks)
Note: Round all amounts to the nearest dollar and ignore GST and provincial taxes. Show the full detail of all steps in your calculations, even if the result is zero
South Western Federal Taxation 2016 Comprehensive
ISBN: 9781305395114
39th edition
Authors: James H. Boyd, William H. Jr. Hoffman, David M. Maloney, William A. Raabe, James C. Young