Problem
Donald Kong incurred the following income, disbursements, and losses in 2020 and 2021:
|
|
2020
|
2021
|
|
Employment income
|
$25,000
|
$28,000
|
|
Proprietorship income
|
0
|
5,000
|
|
Proprietorship loss
|
3,000
|
0
|
|
Dividend income (non-eligible dividends)
|
10,000
|
10,000
|
|
Bond interest
|
1,000
|
1,100
|
|
Business investment loss on loan made to a qualified small business corporation
|
10,000
|
0
|
|
RRSP contribution
|
2,000
|
2,000
|
|
Taxable capital gains from the sale of public shares
|
0
|
1,000
|
|
Allowable capital losses from the sale of public shares
|
2,000
|
0
|
Additional information:
1. 2019 was the first year that Donald sold a capital asset.
2. Donald incurred a business loss of $5,000 from the proprietorship in 2019 (the first year of the business) that was not needed to reduce net income for tax purposes in 2019.
3. Donald has never used the lifetime capital gains deduction.
Task
Calculate Donald's minimum taxable income for 2020 and 2021, in accordance with Section 3 of the Income Tax Act.