Module 6: Capital gains and losses - PD Net

POD ACB Selling
expenses
Capital gain
Family car 1 $ 15,000 $ 12,000 $ 500 $ 2,500
Persian carpet 1,200 1,000 2 — 200
$ 16,200 $ 13,000 $ 500 $ 2,700
Taxable capital gain (1/2) $ 1,350
2 The ACB is deemed to be the greater of the following amounts [paragraph 46(1)(a)]:
Notes:
$1,000
cost: $600
1. The disposition of family car 2 gives rise to a non-allowable loss [subparagraph 40(2)(g)(iii)]:
POD $ 10,000
ACB (14,000)
Loss $ (4,000)
2. The result is the same for the home computer:
POD (greater of $1,000 or the POD) $ 1,000
ACB (2,000)
Loss $ (1,000)
[non-allowable — subparagraph 40(2)(g)(iii)]
Listed personal property
POD ACB Selling
expenses
Net gain
(loss)
Painting 1 $ 30,000 $ 2,000 $ 1,500 $ 26,500
Painting 2 5,000 8,000 400 (3,400)
Diamond ring 50,000 10,000 — 40,000
$ 85,000 $ 20,000 $ 1,900 $ 63,100
Taxable net gain (1/2) $ 31,550
Part (b): Paul's income for 2009 as determined by Cantax
1. Start Cantax and open file TX1M6P1. Save the file under your own initials.
2. At the Index, open the "Taxable capital gains" folder. Double click the form titled "T1-S3: Capital
gains (or losses)."
3. Go to area 3 on the form, "Publicly-traded shares, mutual fund units, deferral of eligible small
business corporation shares and other shares" and enter in the data for ABD Inc. In the first row
of this schedule, type 200 in the "Number of shares" cell, ABD Inc as the Corporation name,
1995 as the Year acquired, 45000 as Disposition proceeds, 30000 as Adjusted cost base, and
2000 for Outlays & expenses. Cantax computes a Net gain of $13,000. Hit the Tab or Enter key
and a second line will open automatically for you.
4. Repeat step 3 to report the dispositions of shares for DEF Inc., KING Inc., and QUEEN Inc., using
the information given in the problem. When you have entered all four dispositions of shares,
Cantax should report a net loss of $92,000 on the transactions.
file:///F|/Courses/2010-11/CGA/TX1/06course/m06t06sol.htm[11/10/2010 4:42:01 PM]