Layla Kiffin has come to you and asked you to prepare her 2019 tax return. Layla was a residence of Saskatchewan for all of 2019. She is married to Lane Kiffin and they have one child who was 12 years old at the end of 2019. Layla has provided you with the following information:

Layla was employed as a consultant till the end of 2018, but due to the recession she was unemployed for all of 2019. Her husband Lane had no income during 2019.

As she was unemployed during 2019, she spent the entire year investing. She had the following investment income during the year:

• Interest Income from “RBC Inc.” of $25,000.

• Eligible Dividend Income from “Potash Corp Inc.” of $5,000

  Layla made the following shares purchases and sales during 2016 to 2019:

  • Mar 5, 2016 - Bought 1,000 shares of Potash Corp @ $5 per share (to make this purchase she used US funds, which means the $5 per share is US funds. At the time of purchase the US exchange rate was 0.90; meaning $1.00 US dollar would buy $0.90 CDN dollars).

  • Apr 1, 2019 - Bought 800 shares of Potash Corp @ $10 per share (CDN funds)

  • Oct 20, 2019 - Bought 100 shares of Potash Corp @ $9 per share (CDN funds)

  • Aug 1, 2019 - Sold 1,200 shares of Potash Corp @ $15 per share. This sale was done in US funds. At the time of sale, the US exchange rate was $1.10; meaning $1.00 US dollar would buy $1.10 CDN dollars.

    Layla also noted that during 2019, she made the following disbursement:

• Investment fees of $1,000 were paid to RBC Inc. for investment advice during 2019. This advice was considered general advice and not tied to any specific transaction.

• Donated $500 to various charitable organizations.

  Required: For 2019, compute the following amounts for Carrie:

  1. 1) Net Income for Tax Purposes

  2. 2) Taxable Income

  3. 3) Taxes Payable

  4. 4) Credits

  5. 5) Taxes Owing or Refundable

Answer rating: 100% (QA)

1 Net Income for Tax Purposes Interest Income 25000 Eligible Divi... View the full answer