Bob Smith opens a new retail business operation on January 1, 2016. Relevant information for 2016 and the subsequent three taxation years follows.

Year Ending December 31, 2016

During this first year of operations, his net business income is $33,600. In addition to his new retail business, he begins a farming operation which loses $24,200 during its first year of operation. He has always been an active investor in the stock market and, during 2016, he has the following results:

Eligible Dividends                                                         $3,050

Taxable Capital Gains                                                    1,150

Allowable Capital Losses                                               6,860

Year Ending December 31, 2017

The 2017 operations of his retail business result in a net business loss of $33,700. His farming operation produces a net income of $3,650. His investment results for 2017 are as follows:

Eligible Dividends                                                         $3,850

Taxable Capital Gains                                                    3,470

Year Ending December 31, 2018

His retail operation produces net business income of $53,200 for 2018. The farming operation is also profitable, producing a net income of $5,480. His 2018 investment results are as follows:

Eligible Dividends                                                         $4,860

Taxable Capital Gains                                                    3,870

Year Ending December 31, 2019

For 2019, his retail business experiences a net business loss of $32,670. In addition, he has a net farm loss of $2,460. Investment results are as follows:

Eligible Dividends                                                        $ 7,920

Taxable Capital Gains                                                  23,360

Allowable Capital Losses                                             24,940

Because his farming activities are secondary to his business activities, his losses are restricted.

In each of the four years 2016 through 2019, Bob needs $24,618 in Taxable Income to absorb his personal tax credits.

When he has a choice, Bob would prefer to deduct maximum net capital loss carry overs. He will also carry back any current losses to the earliest possible year.

Prior to 2016, because of significant health issues, Bob had no amounts of Tax Payable. This means that it would not be useful to carry back any type of loss to years prior to 2016.

Required: 

Calculate Bob’s minimum Net Income For Tax Purposes and Taxable Income for each of the four years. Indicate the amended figures for any years to which losses are carried back. Also indicate the amount and types of loss carry overs that would be available at the end of each year.

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