Ch. 18 - Division C Deductions - Personal

Question 1

Employee Stock Options

• what is deduction
• Timing of deduction

Answer 1

• deduction is 1/2 of benefit inclusion (inclusion is difference between option value and exercise price)
• 1. CCPCs deduction is when shares are sold, and 2. PubCos deduction is when the option is exercised

Question 2

Deduction for Payments

- Payments included in deductions

Answer 2

1. Guaranteed Income Supplement
2. Social assistance payments
3. Workers compensation

Question 3

Loss Carryovers (Non-capital losses)

• Carry rules
• Deducted against

Answer 3

• Three years back and 20 years forward

- Any income

Question 4

Loss Carryovers (Restricted Farm Losses)

• Deduction period
• Deductible against
• Farming categories

Answer 4

• Three years back and 20 years forward
• Only against farming income
• 1. full-time farmers losses are ‘non-capital losses’
     
     2. hobby farmers losses are not deductible at all
     3. part-time farmers deduction is:
        a) first $2,500; plus
        b) lesser of loss less $2,500 / 2 and $15,000

Question 5

Loss Carryovers (Allowable business investment losses [ABIL])
- Deduction period
- Deductible against
Special carryover rule

Answer 5

• Three years back and 10 years forward
• Any type of income
• If it can’t be used in the regular ABIL period, it is added to net capital loss balance

Question 6

Loss Carryovers (Net capital losses)

• Deduction period
• Deductible against

Answer 6

• Three years back and forward indefinitely

- Taxable capital gains

Question 7

LCGE

Answer 7

Lifetime Capital Gains Deduction

Question 8

Deductions for Northern Residents

• Purpose
• Deduction calculation

Answer 8

• To compensate those for the higher cost of living up north
• with a house: $22 per day; and without a house: $11 per day (an intermediate zone is half the deduction of a northern zone)