Mr. John Klaus has an unincorporated business with a December 31 year end. During 2019, its first year of operation, the business has net business income of $19,000 and a taxable capital gain of $3,000 [(1/2)($6,000)]. The following amounts relate to the year ending December 31, 2020: Mr. Klaus has no other source of income or deductions in either year. Assume that he wishes to minimize his net capital and non-capital loss carry overs at the end of 2020, without regard to his ability to claim his tax credits for the preceding year (2019). Calculate his Net Income For Tax Purposes and Taxable Income for 2019 and 2020 and any amended amounts for 2019.
Indicate the amount and type of any losses available for carry forward at the end of 2020.

Question

Mr. John Klaus has an unincorporated business with a December 31 year end. During 2019, its first year of operation, the business has net business income of $19,000 and a taxable capital gain of $3,000 [(1/2)($6,000)]. The following amounts relate to the year ending December 31, 2020:  Mr. Klaus has no other source of income or deductions in either year. Assume that he wishes to minimize his net capital and non-capital loss carry overs at the end of 2020, without regard to his ability to claim his tax credits for the preceding year (2019). Calculate his Net Income For Tax Purposes and Taxable Income for 2019 and 2020 and any amended amounts for 2019.
Indicate the amount and type of any losses available for carry forward at the end of 2020.

Quizplus · Accepted Answer

The Answer of Mr. John Klaus has an unincorporated business with a December 31 year end. During 2019, its first year of operation, the business has net business income of $19,000 and a taxable capital gain of $3,000 [(1/2)($6,000)]. The following amounts relate to the year ending December 31, 2020:  Mr. Klaus has no other source of income or deductions in either year. Assume that he wishes to minimize his net capital and non-capital loss carry overs at the end of 2020, without regard to his ability to claim his tax credits for the preceding year (2019). Calculate his Net Income For Tax Purposes and Taxable Income for 2019 and 2020 and any amended amounts for 2019.
Indicate the amount and type of any losses available for carry forward at the end of 2020.

Mr John Klaus Has an Unincorporated Business with a December