Tax Credit Row

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From: Ray Farrugia


I've been looking at the trial version of PIA and I believe I can understand how it reaches most of its conclusions but for the life of me I can't figure out what information it is using to calculate the tax credit.

Can somebody please help??

 

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Reply: 1
From: Ian Somers


You can think of the tax credits as a tax refund (or liability if negative). To get the tax credit, simply add the income from the property to your current taxable income, subtract the deductions associated with the investment (interest, rental expenses, depreciation, loan costs, etc) and recalculate the tax. The difference between what you would have paid and what you would now pay is the tax credit. If you take advantage of Section 221D (now Section 15-15) of the Tax Act, you can claim the tax credit as a reduction in PAYE tax rather than wait for a tax refund.