Case AMr. Dorne had an employment income of $50,000 and an interest income of $12,000. His unincorporated business lost $23,000 during this period. As the result of dispositions of capital property, he had taxable capital gains of $95,000 and allowable capital losses of $73,000. His Subdivision e deductions for the year totaled $8,000. He also experienced a loss of $5,000 on a rental property that he has owned for several years.Case BMr. Dorne had an employment income of $45,000, a net rental income of $23,000, and a loss from his unincorporated business of $51,000. As the result of dispositions of capital property, he had taxable capital gains of $25,000 and allowable capital losses of $46,000. His Subdivision e deductions for the year amounted to $10,500. Fortunately for Mr. Dorne, he won $560,000 in a lottery on February 24.Required:For both Cases, calculate Mr. Dorne’s Net Income For Tax Purposes (Division B income). Indicate the amount and type of loss carryovers that would be available at the end of the current year or state that no carryovers are available.

Carryover losses are the losses which the taxpayer has the incurred and which has remained still…

Answered: For both Cases, calculate Mr. Dorne’s…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 31P

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Case A

Mr. Dorne had an employment income of $50,000 and an interest income of $12,000. His unincorporated business lost $23,000 during this period. As the result of dispositions of capital property, he had taxable capital gains of $95,000 and allowable capital losses of $73,000. His Subdivision e deductions for the year totaled $8,000. He also experienced a loss of $5,000 on a rental property that he has owned for several years.

Case B

Mr. Dorne had an employment income of $45,000, a net rental income of $23,000, and a loss from his unincorporated business of $51,000. As the result of dispositions of capital property, he had taxable capital gains of $25,000 and allowable capital losses of $46,000. His Subdivision e deductions for the year amounted to $10,500. Fortunately for Mr. Dorne, he won $560,000 in a lottery on February 24.

Required:

For both Cases, calculate Mr. Dorne’s Net Income For Tax Purposes (Division B income). Indicate the amount and type of loss carryovers that would be available at the end of the current year or state that no carryovers are available.

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