taxation 3 questions

please answer 3 questions TAXATION .

1.On August 1 of the current year, Kates employer Shop Inc. provided him a vehicle. For Shop Inc. to purchase the vehicle it would cost $45,000 including all applicable taxes. Whereas leasing the vehicle would cost Shop Inc. $750 a month. In either case, Shop Inc. would pay all operating costs for the vehicle, which is expected to be $2,250 yearly. Kates estimates that he will drive 2,100 monthly, of which 300 km will be for employment.

a) Determine the amount to be included in Kate’s employment inform for the current year if i)

Shop Inc. purchases the car and ii) if Shop Inc. leases the car.

b) Kate drives the car for 16,000 km for employment purposes and 6,000 for personal use in the following year. Determine the amount to be included in his personal taxes assuming Shop Inc. leases the vehicle

Vehicle formulas

Operating expense benefit= prescribed rate (28 cents) X Personal KMS

Standby charge= Original cost of vehicle X 2% X # months available

Standby Charge = Monthly lease cost x 2/3 X 8 months available

Reduce Standby charge= (Personal km driven/1,667 km per month) X standby charge

2.Installment Payments

Below are Ms. Clarke’s income’s for 2016 and 2017, and estimated income from 2019. Determine if Ms. Clarke is required to make installment payments, and which alternative would be preferred for each case presented.

Case A

2019 estimated 4000

2018 1000

2017 2500

Case B

2019 estimated 3000

2018 4000

2017 3500

Case C

2019 estimated 1000

2018 3000

2017 5500

Case D

2019 estimated 4000

2018 nil

2017 3500

3. Question 1

Mr. Doyle 2018 income and deductions are listed below. Calculated for the following two cases, Mr. Doyle’s Net Income for tax purposes and indicate any possible loss carryovers from the current year.

Case A

Employment Income………………………..28,000

Income(loss) from Business………………(36,000)

Income from property ………………………..15,000

Taxable Capital Gains…………………………21,000

Allowable Capital Losses ……………………(27,000)

Subdivision E Deductions (spousal support)….(11,000)

Case B

Employment Income…………………..16,000

Income (loss) from Business ……….(21,000)

Income from property……………………22,000

Capital Gains ……………………………..64,000

Capital Losses …………………………….(138,000)

Subdivision E Deductions (spousal support) ……(5,000)

 

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