Byrd & Chen's Canadian Tax Principles, , 1st Edition. Volume 1, Volume 2 by Clarence Byrd, Ida Chen. ISBN-13: 9780137856527. All Chapters. (Complete) Solutions Manual & TEST BANK
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Byrd and Chen\'s Canadian Tax Principles, 2022-2023, volume 1, volume 2, and Study guide
Byrd & Chen's Canadian Tax Principles, , 1st Edition. Volume 1, Volume 2 by Clarence Byrd, Ida Chen. ISBN-13: 9780137856527. All Chapters. (Complete) Solutions Manual & TEST BANK All Chapters. (Complete) Solutions Manual & TEST BANK TABLE OF CONTENT 1 Introduction to Federal Taxation in Canada 2 Pr...
Byrd & Chen's Canadian Tax Principles Volume 1 2022 - 2024 edition By Gary Donell Byrd & Chen |All Chapters, Latest-2024|
Byrd & Chen's Canadian Tax Principles Volume 2 2022 - 2024 edition By Gary Donell Byrd & Chen |All Chapters, Latest-2024|
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Byrd & Chen's Canadian Tax Principles, , 1st Edition. Volume 1, Volume 2 by Clarence Byrd, Ida Chen.
Byrd & Chen's Canadian Tax Principles 1st
Edition. Volume 1, Volume 2 by Clarence Byrd, Ida
Chen. ISBN-13: 9780137856527
, Byrd & Chen's Canadian Tax Principles, , 1st Edition. Volume 1, Volume 2 by Clarence Byrd, Ida Chen.
Chapter 11
11.1 Online Exercises
) I T A 1 10 . 2p r o vi de s f o ra de du c t i o n of " l um p- s um
1
pa ym e n t s " , f or e x a m pl e a c ou rt o rd e r e d t e rm i na t i
on
be ne f i t . W h a t a x p ol i c yo bj e c t i ve i s s e r ve d by t h i s
pr o vi s i o n ?
A ns w e r: S u c h l um p -s um
pa ym e n t s of t e n re f l e c t c om pe ns a t i o n fo rs e r vi c e s r
e n de r e d o ve r s e ve ra l y e a r s .
T h e f a c t ha t i t i s re c e i ve d i n a s i n gl e y e a r c a n re s u l
t i ns i g ni f i c a nt po rt i on s o fi t b e i ng s u b j e c t oi n c o m
etax
ra t e s h i g he r t h a n w o ul d ha ve be e nt he c a s e ha di t b e e
nr e c e i v e d o v e r t h e s e v e ra l y e a rs du r i n g w hi c h i t w a
s
e a rn e d. T h e d e d uc t i o no fs uc ha m o u nt s p ro vi d e s t h e
ba s i s f or a n a l t e r na t i ve i nc om e t a x p a y a b l e
c a l c ul a t i o n w hi c ha t e m p t s t o a dj us t he a m o u nt pa i d
t o t h e a m o u nt ha t w ou l d h a v e b e e n pa i d i f t h e
a m o u nt ha d a c t u a l yb e e n re c e i v e d o ve rs e v e r a l y e a r
s . T h e o bj e c t i v e o fs uc h pr ov i s i o ns i s f a i r n e s or
e q ui t y .
Type:ES
Topic:Lump-sum payments-ITA110.2
) T h e c a r y ov e r pe ri o ds fo rl os e s va ri e s w i t ht he t y
2
pe of l os .B r i e f l y de s c ri be t h e c a ry o ve r pe ri o ds t h
at
t h e I T A p r ov i de s f or t he t y pe s o fl os e s t ha t i t i de n
tifies.
A ns w e r: T h e c a r y ov e r p e r i od s f o rt he va ri ou s t yp e s o
fl os e s i d e n t i f i e d i n t h e In c o m e T a x A c t a nd
c o ve r e d i n t h e t e x t u pt oC h a p t e r1 1 a r e a s f ol o ws :
• No n -C a p i t a l L o s e s a n dF a rm
L os e s (i nc l u di ng r e s t ri c t e df a r m
l os e s ): 2 0y e a rs f or w a rd a nd 3 ye a r s b a c k .
• Ne t C a p i t a l L os : U nl i m i t e d fo r w a rd a n d3 y e a rs ba c k
• L i s t e dP e rs on a l P r o pe rt y L os e s : 7 ye a rs fo r w a r da n
d3 y e a rs ba c k .
, Byrd & Chen's Canadian Tax Principles, , 1st Edition. Volume 1, Volume 2 by Clarence Byrd, Ida Chen.
• Al o w a b l e B u s i n e s I nv e s t m e n t L os e s : 1 0y e a rs , a s a
no n -c a p i t a l os t h e n c on ve rt e d t o n e t c a pi t a l o s
w i t h un l i m i t e d c a r yf o r wa rd i n y e a r1 1 .
•F o r e i gn T a x C re di t s : 1 0 y e a rs fo r w a r d a n d 3y e a rs b a
ck.
C ov e re di nC h a p t e r1 8 a r e l i m i t e dp a rt n e rs h i p l o s e s .
T h e y ha v e n o c a r y ba c k a nd a nu nl i m i t e d c a r y
fo r w a r d ,b ut on l y a ga i n s t he pa rt n e r s h i p i n c o m e t o w h
i c ht he y re l a t e .
Type:ES
Topic:Loscar yovers-generalconcepts
) W h e na b us i n e s h a s s e v e ra l t y pe s o fl os c a r y ov e r s
3
, w hy i s i t ne c e s a r yt ok e e p s e pa ra t e ba l a n c e s f o r
eachtype?
A ns w e r: T h e r e a re t w or e a s on s f o rh a v i n gt ot ra c ke a c
ht yp e of l o s c a r y fo r w a r ds e p a r a t e l y .F i rs t ,
di f f e r e nt y pe s o fl os e s ha v e d i f f e re nt c a ry o ve r pe ri o
ds (e . g. , 20 y e a rs fo rf a rm l os e s v s . u n l i m i t e d fo r
c a pi t a l o s e s ) . S e c o n d, s o m e t y pe s o fl o s e s c a n on l y b
e a p l i e d a g a i ns t he e qu i v a l e nt yp e of i nc om e
(e .g . ,c a pi t a l os e s c a no n l y be c a r i e d o ve r a n da p
l i e d a g a i ns t c a pi t a l g a i n s ) .
Type:ES
Topic:Loscar yovers-generalconcepts
, Byrd & Chen's Canadian Tax Principles, , 1st Edition. Volume 1, Volume 2 by Clarence Byrd, Ida Chen.
) T a xa dv i s or s w i l n orm a l y r e c om m e n d t h a t l os c a ry
4
ov e r s no t b e u s e dt or e d u c e t a xa bl e i n c o m e t o ni l
fo ra n i n di vi du a l . W h a t i s t h e b a s i s fo r t h i s r e c om m
e n da t i o n?
A ns w e r: T h i s r e c o m m e n da t i o nr e f l e c t s t he f a c t h a t
m os t p e r s on a l t a x c r e d i t s a r e n o n- re f u nd a bl e a nd
can
ot be c a r i e d o ve rt o ot he r y e a rs . T hi s m e a n s t ha t , u
nl e s a n i nd i vi du a l t a x pa ye rh a s t a x a b l e i n c o m e
a n df e de ra l i nc om e t a x p a y a b l e ,t h e v a l ue of t he s e
c r e d i t s i s s i m pl yl os t . T h i s , i ne f f e c t , i s w ha t w ou
l d ha p
e n i f va ri o us t y pe s o fl os c a r y ov e r s w e r e u s e dt or e
du c e t a x a b l e i n c o m e t o ni l .
Type:ES
Topic:Loscar yovers-individual
) B ri e f l y de s c r i b e t he i n c om e t a x t r e a t m e nt of l o s
5
e s on l i s t e d p e rs o na l p r op e r t y .
A ns w e r: L o s e s o nl i s t e dp e rs on a l p ro pe rt yc a n b e d e
du c t e dd ur i n gt he c ur e nt y e a r, b ut on l y a g a i ns t n e t
ga i n s o nl i s t e d pe rs o na l p ro pe r t y fo rt he ye a r. If t
he l o s c a n ot be us e d d ur i n gt he c ur e nt y e a r, i t c a n be
c a ri e db a c kt hr e e y e a rs or fo r w a r ds e ve ny e a rs .
Type:ES
Topic:Loses-listedpersonalproperty
) If a t a x p a y e r ha s b ot h ne t c a p i t a l a n d no n-
6
c a pi t a l o s e s a n d do e s no t h a v e s uf f i c i e nt i n c o m e i
nt he c u re nt a n d pr e v i o u s ye a r s t oc l a i m
t h e s e a m o un t s , w hi c ht yp e of l o s s ho u l d be de d uc
t e df i rs t ?
A ns w e r: T h e r e i s n oc l e a r c ut a n s w e r t o t hi s q ue s t i o
n. N e t c a p i t a l os e s h a v e a n un l i m i t e dl i fe bu t c a n
on l y b e c a ri e do v e r t o t h e e xt e n t o f ne t a xa bl e c a pi t
a l ga i n s i nt h e c a r y ov e rp e ri od .
T hi s w ou l ds u ge s t h a t ,i fn e t a xa bl e c a p i t a l ga i n s
a r e p r e s e n t i nt he c ur e nt y e a r, t h e us e o fn e t c a pi t
al
l os e s s h o ul d r e c e i v e pr i o ri t y . T hi s w o ul db e pa rt
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