Question

19. Rafaela donated a painting to a registered charity. An independent appraiser valued the painting at $150,000. Rafaela bought the painting eight year ago for $60,000. Her income from other sources is $70,000.

a) What is her taxable income for the year?


b) How much of the $150,000 donation can she claim in the current year?


c) What is the value of her federal tax credit for the year?


d) How much of the donation can she carry forward to subsequent years? (1 mark)



Scott sold the cottage

Total Gain

Answer 1

Ans.(a)

Calculation of taxable income for the year

Particulars	$
income from other sources	70,000
(-) Deductions (Deduction available = FMV of painting donated =$150,000)	70,000
Taxable income	NIL

Ans.(b)

She can claim $70,000 out of the $150,000 donation in the current year.

Ans.(c)

the value of her federal tax credit for the year

= total deduction available

=$150,000

Ans.(d)

She can carry forward $80,000 of donation to subsequent years.

= total deduction available -total deduction claimed in current year

=$150,000 - $70,000

=$80,000