During the year ending December 31, 2019, Melanor Ltd. reported accounting Income Before Taxes of $225,000. This was followed in the year ending December 31, 2020, by an accounting Loss Before Taxes of $372,000. Both of these amounts were determined using generally accepted accounting principles. Included in the above income figures were the following amounts: The above accounting gains (losses)on the sale of shares are equal to the capital gains (losses)on the sale of the shares.
At the beginning of the 2019 taxation year, the Company has available a non-capital loss carry forward of $12,000 and a net capital loss carry forward of $10,000 [(1/2)($20,000)]. There has not been sufficient Net Income For Tax Purposes to deduct these amounts in any previous year. It is the policy of Melanor Ltd. to minimize non-capital loss carry overs.
Required: Calculate the minimum Net Income For Tax Purposes and Taxable Income for each of the two years 2019 and 2020 and indicate the amount and type of any carry overs that are available at the end of each year.

Question

During the year ending December 31, 2019, Melanor Ltd. reported accounting Income Before Taxes of $225,000. This was followed in the year ending December 31, 2020, by an accounting Loss Before Taxes of $372,000. Both of these amounts were determined using generally accepted accounting principles. Included in the above income figures were the following amounts:  The above accounting gains (losses)on the sale of shares are equal to the capital gains (losses)on the sale of the shares.
At the beginning of the 2019 taxation year, the Company has available a non-capital loss carry forward of $12,000 and a net capital loss carry forward of $10,000 [(1/2)($20,000)]. There has not been sufficient Net Income For Tax Purposes to deduct these amounts in any previous year. It is the policy of Melanor Ltd. to minimize non-capital loss carry overs.
Required: Calculate the minimum Net Income For Tax Purposes and Taxable Income for each of the two years 2019 and 2020 and indicate the amount and type of any carry overs that are available at the end of each year.

Quizplus · Accepted Answer

The Answer of During the year ending December 31, 2019, Melanor Ltd. reported accounting Income Before Taxes of $225,000. This was followed in the year ending December 31, 2020, by an accounting Loss Before Taxes of $372,000. Both of these amounts were determined using generally accepted accounting principles. Included in the above income figures were the following amounts:  The above accounting gains (losses)on the sale of shares are equal to the capital gains (losses)on the sale of the shares.
At the beginning of the 2019 taxation year, the Company has available a non-capital loss carry forward of $12,000 and a net capital loss carry forward of $10,000 [(1/2)($20,000)]. There has not been sufficient Net Income For Tax Purposes to deduct these amounts in any previous year. It is the policy of Melanor Ltd. to minimize non-capital loss carry overs.
Required: Calculate the minimum Net Income For Tax Purposes and Taxable Income for each of the two years 2019 and 2020 and indicate the amount and type of any carry overs that are available at the end of each year.

During the Year Ending December 31, 2019, Melanor Ltd