Question #4 (6 marks) Make It Walk Inc. is a prominent designer of luxury canes and walkers for elderly individuals. Make It Walk Inc. was once a very successful company, however, lately they have suffered hard times due to a trend toward scooters. Tim Bunns Corp. is a highly successful hair styling business that focuses exclusively on man buns for younger men. Tim Bunns Corp. has been very successful in their business by marketing heavily to individuals who had grown out their hair in the hopes of having their dream man bun. Tim Bunns Corp. approached Make It Walk Inc. with an offer to acquire them as the owner of Tim Bunns is getting older and feels that this aligns with something he may want in the near future. On July 22, 2019, Tim Bunns acquired Make it Walk. Prior to the acquisition, Make It Walk had the following tax balances. 2015 Net Capital Loss Carryforward $15,000 2016 Net Capital Loss Carryforward $20,000 2016 Non-Capital Loss Carryforward $10,000 2018 Non-Capital Loss Carryforward $35,000 Tim Bunns has no net capital loss or non-capital loss carryforwards available at the start of the 2019 taxation year. Post-acquisition, for the taxation year ended December 31, 2019, Tim Bunns earned net income for tax purposes of $250,000, of which $10,000 was taxable capital gains, $220,000 were income from hair styling, and $30,000 was from sales of luxury canes and walkers. Required: 1. What is the deemed year-end for Make It Walk upon acquisition of control (1 mark)? 2. Calculate the taxable income of Tim Bunns for the December 31, 2019 taxation year (2.5 marks). 3. Calculate the ending balance of the net capital loss and non-capital loss carryforwards to Tim Bunns as at December 31, 2019 (2.5 marks). Question #4 (6 marks) Make It Walk Inc. is a prominent designer of luxury canes and walkers for elderly individuals. Make It Walk Inc. was once a very successful company, however, lately they have suffered hard times due to a trend toward scooters. Tim Bunns Corp. is a highly successful hair styling business that focuses exclusively on man buns for younger men. Tim Bunns Corp. has been very successful in their business by marketing heavily to individuals who had grown out their hair in the hopes of having their dream man bun. Tim Bunns Corp. approached Make It Walk Inc. with an offer to acquire them as the owner of Tim Bunns is getting older and feels that this aligns with something he may want in the near future. On July 22, 2019, Tim Bunns acquired Make it Walk. Prior to the acquisition, Make It Walk had the following tax balances. 2015 Net Capital Loss Carryforward $15,000 2016 Net Capital Loss Carryforward $20,000 2016 Non-Capital Loss Carryforward $10,000 2018 Non-Capital Loss Carryforward $35,000 Tim Bunns has no net capital loss or non-capital loss carryforwards available at the start of the 2019 taxation year. Post-acquisition, for the taxation year ended December 31, 2019, Tim Bunns earned net income for tax purposes of $250,000, of which $10,000 was taxable capital gains, $220,000 were income from hair styling, and $30,000 was from sales of luxury canes and walkers. Required: 1. What is the deemed year-end for Make It Walk upon acquisition of control (1 mark)? 2. Calculate the taxable income of Tim Bunns for the December 31, 2019 taxation year (2.5 marks). 3. Calculate the ending balance of the net capital loss and non-capital loss carryforwards to Tim Bunns as at December 31, 2019 (2.5 marks)