Thato Smit Has Provided You with the Following Information for 2020

question 10

Essay

Thato Smit has provided you with the following information for 2020:
That owns rental properties originally valued at $275,000.(Property 1: land $70,000, building $55,000) (Property 2: land $90,000, building $60,000)
The buildings are Class 1 (4%) properties.Net rental income before CCA in 2020 was $11,000.
$\bullet$ The UCC on building 1 at the beginning of 2020 was $50,000.
$\bullet$ The UCC on building 2 at the beginning of 2020 was $40,000.
$\bullet$ Property 2 was sold in 2020 for $250,000 (land $200,000, building $50,000)
Thato owns shares in ABC Inc.(a CCPC) valued at $50,000, and received $5,000 in non-eligible dividends on the shares in 2020.
Thato purchased a 5-year GIC two years ago for $30,000, and the interest earned in 2020 was $1,000.
Thato worked full-time as a baker in 2020, earning a gross salary of $45,000.
Thato is in a 45% tax bracket.
Required:
Calculate Thato's net income for tax purposes in 2020 in accordance with Section 3 of the Income Tax Act (exclusive of the enhanced CPP).Thato will take the maximum CCA allowed this year on the rental properties.

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Definitions:

Document Formatting Restrictions

Document formatting restrictions are limitations or rules set within document creation software that control how text, pages, and other elements can be modified or arranged.

Modify Properties

The act of changing attributes or settings of files, folders, or software components, to alter their behavior or appearance.

Remove Restrictions

The action of lifting or eliminating limitations or constraints, often referring to unlocking features or functionalities in software or digital content.

Stop Protection

A feature or mechanism that halts the operation to protect a system or device from damage.