Mr. Dalip Bourne provides you with the following financial information for the years 2018 through 2021.

2018: During this year, Dalip starts a new business that, during its first year of operations, has a business income of $19,900. In addition, because of his love of the outdoors, he begins to carry on a farming business on a part-time basis. The farming business experiences a loss of $10,900 in its first year of operation. Using the proceeds of an inheritance, he makes a number of investments in common shares during the year. In 2018, these investments pay $1,850 in eligible dividends. As the result of dispositions in the year, he realizes $1,340 in capital gains and $4,610 in capital losses.

2019: This year Dalip's business has a business loss of $15,600. However, the farming business reports an income of $2,200. Also during 2019, he receives $2,354 in eligible dividends and realizes capital gains of $2,100. He has no capital losses during the year.

2020: Dalip's business income for the year is $32,900. In addition, the farming business reports an income of $3,480. He receives eligible dividends of $3,170 and realizes capital gains of $4,500.Once again, no capital losses are realized.

2021: Dalip's business experiences a business loss of $20,700. In addition, his farming business has a loss of $2,100. Although he receives $5,120 in eligible dividends, he is forced to sell some investments for much needed funds and realizes capital gains of $4,960and capital losses of $15,920.

Because of the nature of his farming activities, Dalip's farm losses are restricted. All of the dividends received are from taxable Canadian corporations.When he has a choice, he would like to deduct the maximum amount of any net capital loss carry overs and carry back any losses to the earliest possible year. Prior to 2018, Dalip was a full-time student with no federal income tax payable. This means that it would not be useful to carry back any type of loss to years prior to 2018. Dalip requires $15,200 in taxable income in each year to fully utilize his available tax credits. In applying carry over amounts, Dalip's Taxable Income should not be reduced below $15,200.

Calculate Dalip'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 carryovers that would be available at the end of each year.

Calculate Dalip's minimum Net Income for Tax Purposes and Taxable Income for 2018.(Round your answers to the nearest dollar.)

The 2018 net income is $--------

and the 2018 taxable income is $----------

None of the losses can be carried back before 2018,

so a 2018 restricted farm loss of $---------

and a 2018 net capital loss of $----------

can be carried over.

Answer rating: 100% (QA)

The 2018 net income is 14040 and the 2018 taxable income is 14040 None of the losses can be carri... View the full answer