Cloris Leachman passed away on July 10, 2021. She was survived by her husband and her...

 

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Cloris Leachman passed away on July 10, 2021. She was survived by her husband and her child. As the executor of her estate you are responsible for determining the tax treatment that results in the lowest possible tax on the estate in respect of the following items. (a) (b) (c) (d) (f) (g) A rental property, purchased in 2006, tax information below, was left to Cloris Leachman's child: UCC- FMV- Asset Land Building Capital Declared January 3 April 6 July 5 Cost Dec. 31/2020 July 15/2021 Paid January 31 April 30 July 31 $134,000 66,000 The rental property generated net rental income of $7,500, before CCA, in the period from January 1, 2020 to July 10, 2021. Ms. Leachman's will directed that 175 shares of Canada Airways Ltd., a public corporation, that were purchased in 2011 for $17,300 be transferred to her husband. The shares had a fair market value of $38,700 on July 10, 2021. Ms. Leachman did not have any net capital losses available to offset the unrealized gain at the time of her death. N/A $36,000 The following taxable dividends from a Canadian-controlled private corporation were declared in 2021 from its low-rate income, prior to her death, and paid in 2021, as indicated: $215,000 Amount $305 330 a. The final (terminal) return. b. The rights or things return. 168,000 360 Ms. Leachman's consulting practice, earned $81,000 of income prior to her death. It's year end was December 31. Term life insurance of $100,000, to cover her business debts, was paid to Ms. Leachman's estate on her death. Ms. Leachman had declared her husband a beneficiary for her RRSP. As a result, the $73,000 (fair market value) was paid to him. REQUIRED: Show all calculations necessary to support your conclusions. 1. Determine the income for tax purposes under Division B in a way that will result in the minimum possible tax consequences in the circumstances. Comment on the adjusted cost base or the tax position of the individuals who inherit property after giving effect to Ms. Leachman's will. (13 Marks) 2. What are the advantages of filing a separate return? (2 Marks) 3. Provide the filing deadlines for the following income tax returns: (3 Marks) Cloris Leachman passed away on July 10, 2021. She was survived by her husband and her child. As the executor of her estate you are responsible for determining the tax treatment that results in the lowest possible tax on the estate in respect of the following items. (a) (b) (c) (d) (f) (g) A rental property, purchased in 2006, tax information below, was left to Cloris Leachman's child: UCC- FMV- Asset Land Building Capital Declared January 3 April 6 July 5 Cost Dec. 31/2020 July 15/2021 Paid January 31 April 30 July 31 $134,000 66,000 The rental property generated net rental income of $7,500, before CCA, in the period from January 1, 2020 to July 10, 2021. Ms. Leachman's will directed that 175 shares of Canada Airways Ltd., a public corporation, that were purchased in 2011 for $17,300 be transferred to her husband. The shares had a fair market value of $38,700 on July 10, 2021. Ms. Leachman did not have any net capital losses available to offset the unrealized gain at the time of her death. N/A $36,000 The following taxable dividends from a Canadian-controlled private corporation were declared in 2021 from its low-rate income, prior to her death, and paid in 2021, as indicated: $215,000 Amount $305 330 a. The final (terminal) return. b. The rights or things return. 168,000 360 Ms. Leachman's consulting practice, earned $81,000 of income prior to her death. It's year end was December 31. Term life insurance of $100,000, to cover her business debts, was paid to Ms. Leachman's estate on her death. Ms. Leachman had declared her husband a beneficiary for her RRSP. As a result, the $73,000 (fair market value) was paid to him. REQUIRED: Show all calculations necessary to support your conclusions. 1. Determine the income for tax purposes under Division B in a way that will result in the minimum possible tax consequences in the circumstances. Comment on the adjusted cost base or the tax position of the individuals who inherit property after giving effect to Ms. Leachman's will. (13 Marks) 2. What are the advantages of filing a separate return? (2 Marks) 3. Provide the filing deadlines for the following income tax returns: (3 Marks)

Answer rating: 100% (QA)

1 A Rental Property Capital Cost UCC 215000 FMV 168000 Net Rental Income 7500 Income for Tax Purposes 7500 Adjusted Cost Base 215000 7500 207500 Tax Position The property will be subject to capital ga... View the full answer