State the tax implications for mad about wraps inc

Reference no: EM13662849

Mad about Wraps Inc., a company owned by Martha Mod, has been operating two locations in British Columbia since 1994. Its fiscal period ends December 31.

In 2014, the company bought four more locations and, in addition to paying for other assets, paid for goodwill as follows:

Location	Goodwill purchased
Vancouver	$ 90,000
Burnaby	20,000
Surrey	10,000
Kelowna	10,000
Total	$ 130,000

Mad About Wraps Inc. sold the two original locations and received the following amounts for goodwill:

Location	Selling price
Victoria	$ 35,000
Delta	10,000
Total	$ 45,000

The balance in the cumulative eligible capital account at the end of 2011 was $20,000 after the deduction allowed under paragraph 20(1)(b). There were no additions or dispositions of ECP in 2012 or 2013.

The maximum deduction allowable under paragraph 20(1)(b) was claimed each year.

Required

State the tax implications for Mad About Wraps Inc. with respect to the goodwill in the 2014 taxation year. Show all your calculations and round all amounts to the nearest dollar.

Reference no: EM13662849

Questions Cloud

State a lewis structure that obeys the octet rule : State a Lewis structure that obeys the octet rule for each of the following ions. Allocate formal charges to each atom.

Explain to edith the tax consequences for herself : Explain to Edith the tax consequences for herself, her husband, and her children, of the gift of the shares to each member of her family - Determine the tax consequences for Edith for 2014 for the disposition of the chalet, and identify any election..

Explain what is the solubility of n2 in water : If a gaseous sample contains 56% N2 by volume, explain what is the solubility of N2 in water at 25°C and 1.0atm (kH in H2O at 25°C = 7 multiplied by 10-4 mol/L•atm)

Find out the relation shown for the radius of the species : Determine the relation shown for the radius of the species indicated. Explain which choice presents a valid comparison

State the tax implications for mad about wraps inc : State the tax implications for Mad About Wraps Inc. with respect to the goodwill in the 2014 taxation year. Show all your calculations and round all amounts to the nearest dollar.

Explain the major products p-anisaldehyde and acetophenone : Explain why is the major product between p-anisaldehyde and acetophenone the crossed aldol product rather than the Cannizzaro reaction or the self-condensation of acetophenone

Proper tax treatment for marks income from this contract : What is the proper tax treatment for Mark's income from this contract? Explain your reasoning.

Demonstrate how you would synthesize trans-2-hexene : Demonstrate how you would synthesize trans-2-hexene, starting with acetylene as well as any compounds containing no more than 4 carbons. Be sure to show the reagents/reactants required in each step of your synthesis.

Calculate cindys income for 2013 under section : Calculate Cindy's income for 2013 under section 3. Show all your calculations and compute Cindy's maximum deductible contributions to an RRSP for 2014.

User Account

All Pages