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Required: Calculate Mr Bodvin's minimum net property income to be included on his 2021 tax return. Also, show any other tax items that will affect Mr Bodvin with regards to his 2021 income tax return.

Required: Calculate Mr Bodvin's minimum net property income to be included on his 2021 tax return. Also, show any other tax items that will affect Mr Bodvin with regards to his 2021 income tax return.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sir please urgently
Property Income Alex Bodvin acquires a residential rental property in June, 2021 at a total cost of $423,000. Of this total, $132,000 can be allocated to the value of the land. He immediately spends $42,000 to make major improvements to the property (added to cost of property) Rents for the year total $32,000, while rental expenses other than CCA total $27,500. This is the only rental property owned by Mr. Bodvin. During the year Mr. Bodvin receives interest income from his investments of $1,500, Mr Bodvin acquired these investment 2 years ago when he took out a loan at his local bank for $30,000 to purchase $20,000 worth of the investments and $10,000 to put a pool in his backyard. During the year he paid $1,200 interest on this loan. In November, he received $5,600 in dividends from investments made in Canadian controlled private corporations, and $6,000 from investments made in Canadian Public Corporations. Mr. Bodvin believes in taking the maximum deductions that he can take to reduce income. Required Calculate Mr Bodvin's minimum net property income to be included on his 2021 tax return. Also, show any other tax items that will affect Mr Bodvin with regards to his 2021 income tax return.
Transcribed Image Text:Property Income Alex Bodvin acquires a residential rental property in June, 2021 at a total cost of $423,000. Of this total, $132,000 can be allocated to the value of the land. He immediately spends $42,000 to make major improvements to the property (added to cost of property) Rents for the year total $32,000, while rental expenses other than CCA total $27,500. This is the only rental property owned by Mr. Bodvin. During the year Mr. Bodvin receives interest income from his investments of $1,500, Mr Bodvin acquired these investment 2 years ago when he took out a loan at his local bank for $30,000 to purchase $20,000 worth of the investments and $10,000 to put a pool in his backyard. During the year he paid $1,200 interest on this loan. In November, he received $5,600 in dividends from investments made in Canadian controlled private corporations, and $6,000 from investments made in Canadian Public Corporations. Mr. Bodvin believes in taking the maximum deductions that he can take to reduce income. Required Calculate Mr Bodvin's minimum net property income to be included on his 2021 tax return. Also, show any other tax items that will affect Mr Bodvin with regards to his 2021 income tax return.
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