Mr. A has a 50% partnership interest in ABC Ltd. The calculation of business income from the
Question:
Mr. A has a 50% partnership interest in ABC Ltd. The calculation of business income from the partnership for tax purposes before any allocation to the partners for the December 31,2021, taxation year is as follows:
Net income per financial statements $775,000
Partner salaries 150,000
Non-deductible meal and entertainment expenses 5,000
Political Contributions 152,000
Non-deductible life insurance premiums 33,000340,000
Deduct:
Capital Cost Allowance (45,000)
Net business income for tax purposes to be allocated $1,070,000
The partnership also received the following income that was not included in the calculation of business income above:
Capital dividends 60,000
Capital gains 40,000
Dividend income 80,000
The adjusted cost base (ACB) Mr.A of his partnership interest was $49,000 at the beginning of the year. Mr.A received 50% of partner salaries.
Required:
Compute the ACB of Mr.A's partnership interest in ABC Ltd. at the end of the year.
Expert Answer:
To compute the adjusted cost base ACB of Mr As partnership interest in ABC Ltd at the end of the y... View the full answer
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
