Mr. Johnson is now a grandfather and gives two of his grandchildren
$100,000 each. They invested the funds identically, and each reported interest income of $8,200 and a capital gain of $3,500. Their parent were contacted by Canada Revenue Agency which enquired as to the source of the funds.
Mr. Johnson was then assessed tax on additional income of $19,900. The two
Grandchildren are 15 and 14 years of age.

 

Mr. Johnson wants to know whether Canada Revenue Agency is correct and, if so, what can be done to prevent this problem from reoccurring.  (How can he gives to his grandchildren and not have similar issues arise)

Answer rating: 100% (QA)

The situation involving Mr Johnson and his grandchildrens gifts has tax implications that need to be addressed Heres an overview of the situation and ... View the full answer