In November 2021, Alex Brown who was employed by X Ltd. , a public corporation, lost his
Question:
In November 2021, Alex Brown who was employed by X Ltd. , a public corporation, lost his job because of the closure of X Ltd. Alex is married to Maria. They have 2 children ages three(3) and six(6). The three year old is physically disabled and is under the care of the local physician. In 2021, Alex earned $140,000 from employment after the deduction of $1,769 for Canada Pension Plan Contributions, $800 for Employment Insurance Contributions and $20,000 for income taxes for the year. The company also deducts from his paycheck $100 per month for contributions to the United Way. Alex also contributed $1,000 in 2021 to the Liberal Party of Canada and $200 to the subway musicians.
Mary earned $210,000 as a self-employed consultant.
The couple employ a full-time nanny, at a salary of $24,000 per year, to take care of their two children while they work. They also paid overnight camp fees of $1,200 for two weeks for the older child.
Alex’s father who is 90 years old lives with the family as he is physically disabled. His income for 2021 was $16,000.
Additional Information:-
i. In 2021, Alex received a termination payment of $21,000 from his old employer.
ii. Alex was previously married. That marriage ended in 2019. As a result of the decision of the divorce court in 2019 Alex was awarded alimony of $500 per month. In 2021 he received the alimony awards from the previous spouse.
iii. In 2020, Alex’s father inherited 10,000 shares of the Ford Motor Company as a result of the death of his brother Jim. Jim had bought the shares in 2010 at a cost of $20 per share. At the time of the death of Jim, the shares were worth $50/share. In March 2021, the shares were transferred to Alex by his father. In December 2021, Alex needed cash and he sold the shares at $140/share.
iv. Alex made contributions of $5,000 to his RRSP for 2021. His earned income in 2020 was $90,000 with a pension adjustment of $5,000. He had unused deduction room of $15,000.
v. In 2021, he incurred a partnership loss of $12,000.
iv. He had the following losses brought forward from previous years:-
a. Net loss from a lawn maintenance business……………………………$17,000
b. Net capital loss………………………………………………………………………… 5,000
Required:-Calculate Alex’s 2021 Federal Taxes Payable under Division B of the ITA. Show all calculations.
