At the beginning of 2023, Mr. Oakland comes to you, a staff accountant, for his tax...

 

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At the beginning of 2023, Mr. Oakland comes to you, a staff accountant, for his tax question. He is currently the Corporate Controller of a public company located in north of Toronto. He was promoted to this position at the beginning of 2022. As a result, he moved from St. Catharines, where his old office was located, to North York to be closer to his new office in Toronto. The distance between his old and new residences is $150 kilometers. Mrs. Oakland has been a full-time housewife looking after the entire family. She had no income in 2022. Their older daughter Izzy is 18 years old, with a long-term disability certified by the family doctor. She is currently a full-time student at the University of Toronto. Their younger daughter Julia, 11 years old, is attending primary school. The following is the details about the family for 2022: A. Mr. Oakland received a gross salary of $118,800, plus a bonus of $23,500. His employer withheld $4,453 for CPP and El contributions. B. Mr. Oakland's employer does not provide any RPP or RRSP to employees, so he purchased $35,000 RRSP at local financial institutions. His earned income for 2021 was $167,460. Mr. Oakland's unused RRSP contribution room was $5,000 at the end of 2021. C. In March 2022, Mr. Oakland exercised all his stock options and purchased 5,000 shares of the company when the market price of the shares was $40 per share. The stock options have an exercise price of $26 per share, same as the market price of the shares on the grant date. Due to the unstable stock market, he sold all the shares for $48 per share at the end of 2022. D. Mr. Oakland paid $5,800 eligible medical expenses in 2022, among which $1,200 was for Mrs. Oakland, Julia, and himself, and the remaining amount was for Izzy. E. In 2022, Mrs. Oakland attended York University from January to April (16 weeks) as a full-time student to complete her MBA degree. Her tuition for the year was $4,100. F. Their older daughter, Izzy has been a dependent of her parents. She received a $3,500 scholarship for her outstanding academic achievement at U of T, and $4,200 wages from her part-time job on Campus in 2022. Her tuition for 2022 was $16,700. G. During the year, Mr. Oakland sold his antique car for $12,850, the adjusted cost base of the car was $15,000. In addition, he sold several collected paintings with an ACB of $16,350 for $45,750. H. They paid $2,800 to a moving company to move their household effects. The legal cost for selling the old house was $4,000 and the legal cost and land transfer tax for the new house totaled $16,200. 1. During 2022, the family paid $8,600 for childcare expenses that are eligible for tax deduction for sending Julia to an overnight summer camp for 4 weeks and after school daycare while her parents had to work or study. J. Mr. Oakland has a $5,000 net capital loss realized in August 2000, and a $2,000 non-capital loss carried forward from 2017. Require: Calculate the Division B Income, Taxable Income, and Federal Tax Liability for Mr. Oakland. At the beginning of 2023, Mr. Oakland comes to you, a staff accountant, for his tax question. He is currently the Corporate Controller of a public company located in north of Toronto. He was promoted to this position at the beginning of 2022. As a result, he moved from St. Catharines, where his old office was located, to North York to be closer to his new office in Toronto. The distance between his old and new residences is $150 kilometers. Mrs. Oakland has been a full-time housewife looking after the entire family. She had no income in 2022. Their older daughter Izzy is 18 years old, with a long-term disability certified by the family doctor. She is currently a full-time student at the University of Toronto. Their younger daughter Julia, 11 years old, is attending primary school. The following is the details about the family for 2022: A. Mr. Oakland received a gross salary of $118,800, plus a bonus of $23,500. His employer withheld $4,453 for CPP and El contributions. B. Mr. Oakland's employer does not provide any RPP or RRSP to employees, so he purchased $35,000 RRSP at local financial institutions. His earned income for 2021 was $167,460. Mr. Oakland's unused RRSP contribution room was $5,000 at the end of 2021. C. In March 2022, Mr. Oakland exercised all his stock options and purchased 5,000 shares of the company when the market price of the shares was $40 per share. The stock options have an exercise price of $26 per share, same as the market price of the shares on the grant date. Due to the unstable stock market, he sold all the shares for $48 per share at the end of 2022. D. Mr. Oakland paid $5,800 eligible medical expenses in 2022, among which $1,200 was for Mrs. Oakland, Julia, and himself, and the remaining amount was for Izzy. E. In 2022, Mrs. Oakland attended York University from January to April (16 weeks) as a full-time student to complete her MBA degree. Her tuition for the year was $4,100. F. Their older daughter, Izzy has been a dependent of her parents. She received a $3,500 scholarship for her outstanding academic achievement at U of T, and $4,200 wages from her part-time job on Campus in 2022. Her tuition for 2022 was $16,700. G. During the year, Mr. Oakland sold his antique car for $12,850, the adjusted cost base of the car was $15,000. In addition, he sold several collected paintings with an ACB of $16,350 for $45,750. H. They paid $2,800 to a moving company to move their household effects. The legal cost for selling the old house was $4,000 and the legal cost and land transfer tax for the new house totaled $16,200. 1. During 2022, the family paid $8,600 for childcare expenses that are eligible for tax deduction for sending Julia to an overnight summer camp for 4 weeks and after school daycare while her parents had to work or study. J. Mr. Oakland has a $5,000 net capital loss realized in August 2000, and a $2,000 non-capital loss carried forward from 2017. Require: Calculate the Division B Income, Taxable Income, and Federal Tax Liability for Mr. Oakland.

Answer rating: 100% (QA)

Step 1 Calculate Division B Income Division B Income includes all types of income except for capital gains and allowable capital losses To calculate Division B Income well consider various components ... View the full answer