The following two Cases make different assumptions with respect to the amounts of income and deductions that are available to Carl Suzak, a Canadian resident, for the current year.
Case A - Carl had employment income of $126,100, as well as income from an unincorporated business of $14,100. A rental property owned by Carl experienced a net loss of $4,600. Dispositions of capital property during the current year had the following results: In compliance with the terms of his divorce agreement, Carl paid deductible spousal support of $600 per month for the entire year. In addition to the preceding items, Carl had a winning lottery ticket which resulted in his receiving a prize of $562,000.
Case B - Carl had employment income of $89,000, interest income of $3,100, and net rental income of $8,600. Carl also operated an unincorporated business. Unfortunately, during the current year, it experienced a net loss of $187,400. Dispositions of capital property during the current year had the following results: Also during the current year, Carl made deductible contributions of $8,600 to his RRSP.
Required: For each Case, calculate Carl's Net Income For Tax Purposes (Division B income). Indicate the amount and type of any loss carry overs that would be available at the end of the current year.

Question

The following two Cases make different assumptions with respect to the amounts of income and deductions that are available to Carl Suzak, a Canadian resident, for the current year.
Case A - Carl had employment income of $126,100, as well as income from an unincorporated business of $14,100. A rental property owned by Carl experienced a net loss of $4,600. Dispositions of capital property during the current year had the following results:  In compliance with the terms of his divorce agreement, Carl paid deductible spousal support of $600 per month for the entire year. In addition to the preceding items, Carl had a winning lottery ticket which resulted in his receiving a prize of $562,000.
Case B - Carl had employment income of $89,000, interest income of $3,100, and net rental income of $8,600. Carl also operated an unincorporated business. Unfortunately, during the current year, it experienced a net loss of $187,400. Dispositions of capital property during the current year had the following results:  Also during the current year, Carl made deductible contributions of $8,600 to his RRSP.
Required: For each Case, calculate Carl's Net Income For Tax Purposes (Division B income). Indicate the amount and type of any loss carry overs that would be available at the end of the current year.

Quizplus · Accepted Answer

The Answer of The following two Cases make different assumptions with respect to the amounts of income and deductions that are available to Carl Suzak, a Canadian resident, for the current year.
Case A - Carl had employment income of $126,100, as well as income from an unincorporated business of $14,100. A rental property owned by Carl experienced a net loss of $4,600. Dispositions of capital property during the current year had the following results:  In compliance with the terms of his divorce agreement, Carl paid deductible spousal support of $600 per month for the entire year. In addition to the preceding items, Carl had a winning lottery ticket which resulted in his receiving a prize of $562,000.
Case B - Carl had employment income of $89,000, interest income of $3,100, and net rental income of $8,600. Carl also operated an unincorporated business. Unfortunately, during the current year, it experienced a net loss of $187,400. Dispositions of capital property during the current year had the following results:  Also during the current year, Carl made deductible contributions of $8,600 to his RRSP.
Required: For each Case, calculate Carl's Net Income For Tax Purposes (Division B income). Indicate the amount and type of any loss carry overs that would be available at the end of the current year.

The Following Two Cases Make Different Assumptions with Respect to the Amounts