David Singer is employed by X Ltd., a CCPC. The Company is located in Brampton, Ontario. Mr.
Question:
David Singer is employed by X Ltd., a CCPC. The Company is located in Brampton, Ontario. Mr. Singer is married with two children, Maria aged 12 and Mario aged 9. On their birthdays in 2021 Mr. Singer gifted each of the children a $2,000 Government of Canada savings bond earning 2% each.
On December 1st. 2021, Mr. Singer was offered a position at Y Ltd. In Ohio, U.S.A. The new employer gave him a moving allowance of $20,000.
Mr. Singer is concerned about his 2021 tax return in Canada and has sought your advice on the matter.
He has provided you with the following additional information:-
1. Employment income in Canada………………………………………………………..$75,000
Interest income earned on a GIC held at the TD Bank…………………………..5,000
Dividends received from Canadian Tire, a private corporation…………….. 4,000
Dividends received from Telus, a Canadian public corporation…………… 6,000
Dividends received from Microsoft, USA(15% withholding tax)………….. 1,700
Carrying charges on a bank loan……………………………………………………………(2,000)
2. Mr. Singer incurred the following expenses to move from Ontario to Ohio:-
Airfare for himself and family……………………………………………………………….$3,000
Moving Cost of furniture………………………………………………………………………… 1,400
Storage cost……………………………………………………………………………………………. 1,000
Meals for 25 days at a hotel in Ohio, as his house he purchased was
Not ready for occupancy……………………………………………………………….7,000
Hotel for 25 days………………………………………………………………………………………..7,500
Lease cancellation fees on the house he rented in Toronto……………………… 1,000
Legal fees on his house in Ohio………………………………………………………………… 1,200
Vet fees when he arrived in Ohio as his dog had to be quarantined
In Ohio…………………………………………………………………………………………… 800
His salary for the month of December from the new employer was $15,000.
3. In Hamilton, Ontario, Mr. Singer owned 4 rental properties which he plans to keep in Canada as rental properties.
Details of the rental properties are as follows:-
Property #1……....Property #2……...Property#3........Property#4.
Rental Revenue(Loss)…………… $60,000………………..$45,000…….....……(5,000)………….$12,000
EXPENSES:-
Utilities…………………………………...…6,000……………………..9,000…………….4,000………………..3,000
Property Taxes…………………………7,000……………………..5,000…………….3,000………………..2,000
Repair & Maintenance……………..2,000………………………3,500…………….1,000……………….8,000
Mortgage interest…………………….1,500………………………4,500……………..4,000……………….4,000
Opening UCC……………………………$308,209………………$520,225……….$410,250……….$300,000*
*Rental buildings are in Class #1(4%)
4. Mr. Singer had contributed $7,000 to his RRSP on February 1st. 2021. His earned income in 2020 was $120,000. He had a pension adjustment of $6,000 in 2020 and unused deduction room of $10,000
5. Mr. Singer’s divorce was finalized in March of 2021. The Divorce Court awarded Mr. Singer the family boat and the car. The boat was bought in 2019 for $60,000 and the car for $40,000. The fair market value of the boat at the time of the Court order was $90,000 and the car was $35,000.
6. In December 2021, Mr. Singer’s mother had passed away and the employer paid him $15,000 for benefits which was owing to her and which she did not receive as a result of her death.
7. Mr. Singer’s parents had owned a farm in Quebec. In 2015 the family had transferred ownership of the farm to their son David. At the time of the transfer the farm was worth $120,000. The parents had bought the farm in 2006 for $50,000. Mr. David Singer and his family lived in the farm in the summers. In 2021, David Singer sold the farm for $180,000. He incurred real estate commission of $3,600 and legal fees of $1,400.
Required:-
Calculate Mr. Singer’s Net income under Division B of the ITA.
