Calculate the amount to report on each line in the table

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Reference no: EM133157817

Question - Slava Makarov is a 38 year old entrepreneur. He runs his own business and has correctly calculated his net business income for tax purposes to be $120,000 in 2021. He has made all required income tax instalment payments and Canada Pension Plan payments for the year. He has opted out of Employment Insurance.

Slava is also an avid investor. He owns a diverse portfolio of stocks that paid non-eligible dividends in the amount of $10,000 during 2021. He also sold 1,000 shares in ABC Inc., a publicly traded company, during 2021. These shares had an adjusted cost base of $10/share and he was able to sell them for $20/share during the year.

Slava is a divorced father of two. His divorce agreement requires that he pay his ex-wife $1,850 per month in child support and $500 per month in spousal support. Slava made all of the payments during 2021 as required.

Slava has a $6,000 allowable capital loss carryover from a number of years ago that he has not been able to use in a prior taxation year.

 Required -

A. Calculate the amount to report on each line in the table below, including Slava's 2021 Net Income for Tax Purposes and Taxable Income.

Description

Amount

Line 3a

 

Line 3b

 

Line 3c

 

Line 3d

 

Net Income for Tax Purposes

 

Division C Deductions

 

Taxable Income

 

B. Calculate the following Federal Tax Credits for Slava:

Description:

Amount

Federal Dividend Tax Credit

 

CPP Tax Credit

 

Reference no: EM133157817

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