LARRY AND LINDA SMITH ARE MARRIED AND LIVE WITH ALL OF THEIR CHILDREN. THEY HAVE ASKED YOU
Question:
LARRY AND LINDA SMITH ARE MARRIED AND LIVE WITH ALL OF THEIR CHILDREN.
THEY HAVE ASKED YOU TO PREPARE THEIR INCOME TAX RETURNS 2022
ON CANTAX (NOT THEIR CHILDREN'S)
LARRY: SIN # (ANY).; BIRTH: DECEMBER 15, 1970. (Insert your name)
LINDA: SIN # (ANY): BIRTH: JANUARY 12, 1976. (Insert your name)
NOTE: (USE ANY ADDRESS AND ANY OTHER PERSONAL INFORMATION REQUIRED!! THANKS)
CHILDREN:
MARY-BIRTH: MAY 11, 2019; NET INCOME: $0; DISABLED: HEARING LOSS;
MIKE -BIRTH: OCTOBER 12, 2002; NET INCOME/Taxable Income: $15,000; FULL-TIME (8
MONTHS) COLLEGE STUDENT: TUITION: $10,000 PAID BY PARENTS.
Larry worked 500 Hours this year as a Volunteer Fire Fighter. (Volunteer Fire Fighter Credit)
The parents also paid $50,000 in Adoption Fees to officially adopt Mary, this year.
LARRY AND LINDA 'S INVESTMENT INCOME- (Line 12000 and 12100).
TD BANK INTEREST $1,000 (Larry)
CANADA SAVING BONDS INTEREST $500 (Linda)
SCOTIA BANK ELIGIBLE DIVIDEND RECEIVED IN CASH: $1,000 (Larry)
RENTAL INCOME: (LINDA) (Line 12600)
20% of Building is used for personal use)
COMMERCIAL BUILDING CLASS 1, UCC (JAN 1, 2022): $200,000 (net of 20% personal use)
FURNITURE CLASS 8: UCC (JAN 1, 2022): $10,000; PURCHASE: COST $20,000; DISPOSAL:
ORIGINAL COST: $5,000; PROCEEDS: $20,000. Hint: Capital Gain, L12700
GROSS RENT - $90,000
MAINTENANCE EXPENSE - $40,000 (non capital, and deductible)
MORTGAGE INTEREST - $2,000
PROPERTY TAX - $3,000
STOCKS AND OTHER CAPITAL GAINS: (LARRY) (Line 12700)
SOLD HIS LPP-Painting FOR $8,000 WHICH COST HIM $200 TO PURCHASE SOLD XYZ SHARES - COST $30,000; PROCEEDS $50,000
PRIOR YEARS' UNUSED ALLOWABLE CAPITAL LOSSES $10,000 (2005) (Hint: use Line 25300)
STOCKS AND OTHER CAPITAL GAINS: (LARRY) (Line 12700)
SOLD HIS LPP-Painting FOR $8,000 WHICH COST HIM $200 TO PURCHASE SOLD XYZ SHARES - COST $30,000; PROCEEDS $50,000
PRIOR YEARS' UNUSED ALLOWABLE CAPITAL LOSSES $10,000 (2005) (Hint: use Line 25300)
INVESTMENT INTEREST EXPENSE - $2,500; (Line 22100, Schedule 4)
PROFESSIONAL CONSULTING BUSINESS (LARRY) (Use Line 13700 Professional)
REVENUE $40,000;
OFFICE SUPPLY EXPENSES $5,000;
CPA PROFESSIONAL FEES- $500
Home Office Expenses: (100M2 of 1,000M2 of home; Utilities was $1,000; Insurance was $2,000;
Property tax was $3,000)
AUTO: TOTAL KM DRIVEN IN 2022-20,000, BUSINESS-20% total expenses: gas ($5,000); Insurance ($1,200);Maintenance($4,000)
Auto cost (Ucc-$20,000, claim maximum)
PRIOR YEARS' UNUSED BUSINESS LOSSES $20,000 (2018) (Hint: Use Line 25200)
CANTAX T1- ASSIGNMENT #1, CONTINUED PAGE #2
EMPLOYMENT INCOME-LARRY (XYZ Co.)
SALARY-$90,000
Deductions:
El - Maximum for this year. (Look up for 2022)
CPP - Maximum for this year. (Look up for 2022)
INCOME TAX - $30,000
RPP - $3,000
LARRY CONTRIBUTED $5,000 TO HIS WIFE'S SPOUSAL RRSP (2022).
LARRY'S Last Year's EARNED INCOME = $20,000. NO PENSION ADJUSMENT.
EMPLOYMENT INCOME - LINDA (Indiana Corp)
GROSS-$40,000
Deductions:
El - Please calculate (The rate was 1.58%)
CPP - Please calculate. (The rate was 5.7%)
RPP-$1,000
INCOME TAX - $12,000
LINDA CONTRIBUTED THE MAXIMUM ALLOWED TO HER OWN RRSP (2022).
LINDA'S Last Year's EARNED INCOME = $50,000; PENSION ADJJUSTMENT. (Last Year)
=$2,000.
CONTRIBUTIONS: (LARRY AND LINDA)
Charities: UNITED WAY - $1,500; Hospital for Sick Kids - $7,000
QUALIFIED FEDERAL POLITICAL PARTY DONATION- $4,000
QUALIFIED MEDICAL EXPENSES - $10,000 (LINDA)
CHILD CARE EXPENSE (2022) - $5,000 (NANNY) USE ANY NAME AND ADDRESS.
Please ensure that you are backing up your file on a USB Stick or in your Cloud Storage. (Hint: Prior to submitting, please re-do the Medical and Charity Credit)
REQUIRED:
Using Cantax T1-Current, Calculate the Couples "MINIMUM" INCOME TAX PAYABLE for Larry and Linda
Please submit in PDF (as reviewed in class) the following for submission:
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker