Sharon Slotten purchased shares in ATCO Ltd. during the current year as follows: Jan. 1: 200 shares for $25 per share April 2: 300 shares for $30 per share July 1: 100 shares sold for $45 per share Sept. 8: 500 shares for $24 per share On December 22, of the current year Sharon sells 200 ATCO Ltd. shares for $35 per share and pays $100 in sales commission. Required: Calculate the taxable capital gain or loss included in Sharon's NET INCOME under paragraph 3(b) of the Income Tax Act. Solution: Date No. of shares Cost per share Cost in Pool Jan.1 200 $ 25.00 $ 5,000 Apr.2 300 $ 30.00 $ 9,000 Subtotal 01-Jul 100 $ 45.00 $ 4,500 Sept.8 Total Calculation of Capital Gain: Proceeds of disposition Selling costs Adjusted cost base Capital Gain (loss) Capital Gains reserve Capital Gain Inclusion rate Taxable capital gain Total 01-Jul Dec.22 $ 200 $
Sharon Slotten purchased shares in ATCO Ltd. during the current year as follows: Jan. 1: 200 shares for $25 per share April 2: 300 shares for $30 per share July 1: 100 shares sold for $45 per share Sept. 8: 500 shares for $24 per share On December 22, of the current year Sharon sells 200 ATCO Ltd. shares for $35 per share and pays $100 in sales commission. Required: Calculate the taxable capital gain or loss included in Sharon's NET INCOME under paragraph 3(b) of the Income Tax Act. Solution: Date No. of shares Cost per share Cost in Pool Jan.1 200 $ 25.00 $ 5,000 Apr.2 300 $ 30.00 $ 9,000 Subtotal 01-Jul 100 $ 45.00 $ 4,500 Sept.8 Total Calculation of Capital Gain: Proceeds of disposition Selling costs Adjusted cost base Capital Gain (loss) Capital Gains reserve Capital Gain Inclusion rate Taxable capital gain Total 01-Jul Dec.22 $ 200 $
Chapter22: S Corporations
Section: Chapter Questions
Problem 8BCRQ
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Question
Transcribed Image Text:Sharon Slotten purchased shares in ATCO Ltd. during the current year as follows:
Jan. 1: 200 shares for $25 per share
April 2: 300 shares for $30 per share
July 1: 100 shares sold for $45 per share
Sept. 8: 500 shares for $24 per share
On December 22, of the current year Sharon sells 200 ATCO Ltd. shares for $35 per share and
pays $100 in sales commission.
Required: Calculate the taxable capital gain or loss included in Sharon's NET INCOME under
paragraph 3(b) of the Income Tax Act.
Solution:
Date
No. of shares
Cost per share Cost in Pool
Jan.1
200
$
25.00 $
5,000
Apr.2
300
$
30.00 $
9,000
Subtotal
01-Jul
100
$
45.00 $
4,500
Sept.8
Total
Calculation of Capital Gain:
Proceeds of disposition
Selling costs
Adjusted cost base
Capital Gain (loss)
Capital Gains reserve
Capital Gain
Inclusion rate
Taxable capital gain
Total
01-Jul
Dec.22
$
200
$
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