A year and half ago, Max purchased 5,000 shares in a mutual fund called Epic Inc. for $15.75/share. Due to COVID-19, the stock was an epic failure and Max decided to sell 3,000 shares on November 30, 2021, when the share price was at $9.55/share. His investment broker counselled him not to sell as the fund was a back-end loaded fund. Year funds are redeemed/sold Within the first year In the second year In the third year Deferred sales charge 6% 5% 4% 3% 2% In the fourth year In the fifth year In the sixth year 1% After the sixth year 0% a) What is the amount that Max will receive for the sale of these shares (ignore income taxes)? b) Knowing that capital losses are applied against capital gains, what would be the overall taxes payable if Max sold shares in another company called Save The Day Inc. which resulted in a capital gain in 2021 of $50,000 and the shares in point a)? Max is a resident of Quebec and in the highest tax bracket. See Table A.
A year and half ago, Max purchased 5,000 shares in a mutual fund called Epic Inc. for $15.75/share. Due to COVID-19, the stock was an epic failure and Max decided to sell 3,000 shares on November 30, 2021, when the share price was at $9.55/share. His investment broker counselled him not to sell as the fund was a back-end loaded fund. Year funds are redeemed/sold Within the first year In the second year In the third year Deferred sales charge 6% 5% 4% 3% 2% In the fourth year In the fifth year In the sixth year 1% After the sixth year 0% a) What is the amount that Max will receive for the sale of these shares (ignore income taxes)? b) Knowing that capital losses are applied against capital gains, what would be the overall taxes payable if Max sold shares in another company called Save The Day Inc. which resulted in a capital gain in 2021 of $50,000 and the shares in point a)? Max is a resident of Quebec and in the highest tax bracket. See Table A.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Combined Federal & Quebec Tax Brackets and Tax Rates
2021 Marginal Tax Rates
2020 Marginal Tax Rates
Canadian Dividends
Canadian Dividends
Other
Сapital
Other
Сapital
Income
Gains
Non-
Income
Gains
Non-
Eligible
Eligible
2021 Taxable Income
Eligible
2020 Taxable Income
Eligible
first $45,105
27.53% 13.76%
4.53%
18.37%
first $44,545
27.53%
13.76%
4.53%
17.50%
over $45,105 up to $49,020
32.53% 16.26%
11.43%
24.12%
over $44,545 up to $48,535
32.53% 16.26% 11.43%
23.25%
over $49,020 up to $90,200
37.12% 18.56%
17.77%
29.40%
over $48,535 up to $89,080
37.12% 18.56% 17.77%
28.53%
over $90,200 up to $98,040
41.12% 20.56% | 23.29%
34.00%
over $89,080 up to $97,069
41.12% 20.56% 23.29%
33.13%
over $98,040 up to $109,755
45.71% 22.86% | 29.62%
39.28%
over $97,069 up to $108,390
45.71% 22.86% 29.62%
38.41%
over $109,755 up to $151,978
47.46% 23.73% | 32.04%
41.30%
over $108,390 up to $150,473
47.46% 23.73% | 32.04%
40.42%
over $151,978 up to
$216,511(1)
over $150,473 up to
50.23% 25.12% | 35.86%
44.48%
50.15% 25.07% | 35.75%
43.51%
$214,368(1)
over $216,511
53.31% 26.65% | 40.10%
48.02%
over $214,368
53.31% 26.65% | 40.10%
47.14%
Transcribed Image Text:A year and half ago, Max purchased 5,000 shares in a mutual fund called Epic Inc. for
$15.75/share. Due to COVID-19, the stock was an epic failure and Max decided to sell
3,000 shares on November 30, 2021, when the share price was at $9.55/share. His
investment broker counselled him not to sell as the fund was a back-end loaded fund.
Year funds are redeemed/sold
Within the first year
In the second year
In the third year
In the fourth year
In the fifth year
In the sixth year
After the sixth year
Deferred sales charge
6%
5%
4%
3%
2%
1%
0%
a) What is the amount that Max will receive for the sale of these shares (ignore
income taxes)?
b) Knowing that capital losses are applied against capital gains, what would be
the overall taxes payable if Max sold shares in another company called Save
The Day Inc. which resulted in a capital gain in 2021 of $50,000 and the
shares in point a)? Max is a resident of Quebec and in the highest tax bracket.
See Table A.
Calculate the amount of taxes payable on the sale of the shares:
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