Prepare a critical thinking analysis to determine whether the sale of the cottage would be considered business income or a capital gain. If you determine the sale would be a capital gain, then determine whether it would qualify for the principal residence exemption.  

Required: Using MICROSOFT Excel ONLY, respond to the following requirements. All work must be shown to obtain full marks.

 

Part A

Prepare a critical thinking analysis to determine whether the sale of the cottage would be considered business income or a capital gain. If you determine the sale would be a capital gain, then determine whether it would qualify for the principal residence exemption.

 

Part B

Prepare a calculation to determine the best use of the principal residence exemption. Clearly indicate the years designated to each property included in your analysis.

 

Part C

Determine John’s minimum Business Income for 2022.

 

Part D

Determine the minimum Net Income for Tax Purposes and Taxable Income for John, Mary, Dean, Rowena, Crowley and Castiel. Ignore any GST or PST considerations. Show all work, even if the result is zero.

 

Part E

Determine minimum Federal Taxes Payable and Net Federal Taxes Owing for the 2022 taxation year for John, Mary, Rowena and Castiel only (not required for Dean or Crowley). When a credit can be claimed by either John or Mary, include it in John’s taxes unless it is more beneficial to have Mary claim it. Ignore any GST or PST considerations. For any amounts provided but excluded from your calculations explain why they have been excluded.

 

Part F

Determine any amounts available for carry forward by the family at the end of 2022.

 

 

 

Exhibit I

John’s Electrical

 

John received $193,000 for the work he performed for customers in 2022.  He incurred the following costs related to this work:

 

Supplies                                             $38,100

Webpage                                                  900

Business insurance                               2,600

Truck operating costs                          13,800            Note 1

Salary                                                   15,000            Note 2

Entertainment                                       1,800            Note 3

Charitable donations                              6,000

CRA installment payments                  20,000

 

Notes:

  1. John purchased a truck in 2022 for $59,400 that he uses both personally and for the above contracts. Based on his log, he used the truck 92% to get to the customers’ locations and back home.
  2. Salary was paid to Castiel to prepare the paperwork for John’s customers. He could have hired someone else for $500 per month to complete the same work.

 

  1. Entertainment costs include $800 for tickets to a theatre production that John, Castiel and Mary attended in December. The remainder was for meetings with 10 potential customers to discuss their renovation plans. Only eight of the customers hired John.

 

  1. John does not have a formal office. He uses the basement of house to keep his tools, supplies and paperwork for the business. The basement comprises 25% of the total house space. The following are the house expenditures for the year:

 

Mortgage interest                                           6,500

Property taxes                                               3,900

Home insurance                                            2,500

Utilities                                                           1,500

Cleaning service                                            4,800

Chair and desk for office                               1,300

 

 

 

 

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!