After being married for 8 years, Helene Lister Discovered that, during the last two years, her husband,

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Question:

After being married for 8 years, Helene Lister Discovered that, during the last two years, her husband, Martin, had been having an affair with her mother. On this discovery, she commenced divorce proceedings, moving out of the family home in April 2019. As she was married at 17, immediately after graduating from high school, she had no earned income prior to 2019.

As she has few marketable skills, she experienced difficulty finding employment. Finally, at the end of August, she found a position with a salary of $3,500 per month. During the 4 months of her 2019 employment, her earnings totaled $14,000.

Fortunately, her employer provided benefits, including both a defined benefit pension plan and a group health care plan. She had her employer make matching contributions to the pension plan of $600 each. The employer pays the 2019 cost of the health care plan, which is $700.

The provisions of the divorce settlement are as follows:

Her husband, Martin, will retain the family residence

Her husband, martin, will make a $62,000 lump sum payment in 2019 along with monthly payments of $2000 per month in spousal support. The 2019 monthly payments total $12,000.

Helene will be given full title to a jointly owned rental property. Information on the property is as follows:

Adjusted cost base

Building $342,000

Land 110,000

UCC- Building 293,439

FMV AT TRANSFER

Building 376,000

Land 130,000

Net Rental Loss (Before CCA)

From time of transfer 8600

Helene’s share prior to transfer 3600

Other sources of funds for Helene during 2019 are as follows:

An inheritance from her father’s estate of $82,00.

Eligible dividends from Canadian public companies of $ 1,700.

For both 2019 and 2020. Helene does not anticipate that her income will exceed the limit for the lowest federal tax bracket of 15%. However, she anticipated that for 2021 taxation year, her income will place her in the 26% tax bracket.

Required:

Calculate Helene’s net employment income for 2019.

Determine Helene’s maximum deductible RRSP Contribution for 2020.

As Helene’s personal financial consultant, what advice would you give her regarding her TFSA and RRSP contribution and deduction for 2020?