Question

Individual K donated $8,000 to a Canadian registered charity. K's taxable income is $150,000. What is...

Individual K donated $8,000 to a Canadian registered charity. K's taxable income is $150,000. What is the amount of the federal donation tax credit?

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Answer #1
Answer
Explanation :
As per rule made after 2015,individual will qualify for the top federal 33%donation tax credit rate only if you have income that is subject to the top 33%personal income tax rate.
Taxable income $1,50,000
This will be in case,if our taxable income exceeds $2,00,000.otherwise our donation tax credit will be calculated @29% on annual donation over $200
As given ,individual K donated $8,000 to a Canadian registered charity.
Then,federation donation credit is calculated on = ($8,000-$200) = $ 7,800
amount of federation credit will be 29% of $7,800 ($7,800*29%)
= $2,262
Therefore, the federal donation tax credit will be $2,262

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