You are 45 years-old and have a common-law spouse (Nat). Nat is 47 years old and...

 

 
 

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You are 45 years-old and have a common-law spouse (Nat). Nat is 47 years old and is a school teacher employed by the Calgary Public School Board. Her net income in 2019 was $85,000. You have three children: Jane is 3 years old and attends a daycare program while you are both at work. Joan is 17 years old and has mental health problems. John is 21 years old and attends university on a full time basis for 10 months of the year. His tuition fees are $18,000. In 2019, Mark received a scholarship for $6,000 from your employer. For the past twenty years, you have been employed as a geologist by a large Canadian oil and gas company in Calgary, Alberta. During 2019, your basic gross salary amounts to $143,000. During 2019, your employer withheld the following amounts from your gross wages: $32,000 Federal income tax Employment Insurance premiums Canada Pension Plan contributions Registered pension plan contributions Disability insurance premiums Private health care premiums Shares of Saturday Ltd. Shares of Monday Ltd. Max Max Other Information: 1. In 2019, you also had the following shares transactions involving shares held in public corporations: Proceeds of Disposition $20,000 $10,000 5,400 700 1,200 Cost base and selling costs $15,000 $22,000 Capital Gain or (loss) $5,000 (12,000) 2. In 2019, you received $800 of eligible dividends from Saturday Ltd. 3. In October 2019, you withdrew $6,500 from your Registered Retirement Savings Plan (RRSP). 4. On January 15, 2019, you received options to buy 1,500 shares of your employer's common stock at a price of $20 per share. At that time the shares were trading at $18 per share. You exercised these options on July 6, 2019, when the shares were trading at $25 per share. You did not sell any of the shares during the year. 5. Your employer offers employee loans at a low interest rate of 3%. On April 1, 2019, you borrowed $42,000 from the employer to buy a new vehicle that you will be using for employment duties. The prescribed rates for each quarter in 2019 were as follows: Quarter 1-4% , Quarter 2-5%, Quarter 3-6%, Quarter 4-5%. 6. You are required to use your own vehicle for employment duties and have a signed form T2200 from your employer. The vehicle (class 10.1) was acquired on April 1, 2019 for $42,000 including GST. The company provided you with an allowance of 62 cents per kilometer driven for employment purposes. Your spent $5,600 for gas, oil and maintenance for your vehicle during 2019. The 2019 insurance and registration costs amounted to $2,200. In addition, in 2019, you drove the vehicle a total of 36,000 kilometers, of which 20,000 kilometers were carefully documented as employment-related travel. 7. During 2019, you received several gifts from your employer: • As is the case for all employer's senior staff, you received a $400 Amazon gift certificate. In recognition of 20 years of continuous service, you received a painting that had a retail value of $1,600. • At Christmas, all of the employees receive a gift certificate to buy a Christmas tree at a local tree farm. The estimated fair value of a Christmas tree is $100. 8. Your employer pays for family counselling services relating to mental health issues. The amount paid by the employer was $1,200. 9. Child care expenses for Jane amounted to $10,000 for 2019. 10. You made the following disbursements during the 2019: • • Fees paid to a financial planner Payment of premiums for life insurance Professional dues Contributions to an RRSP Tuition fee to attend a course needed for your employment** **Your employer reimbursed you for the tuition fees for the course. • • 11. Your father, Robert, lives with you. He is 82 years old and his 2019 Net Income for Tax Purposes is $18,900. Robert has numerous health issues and is no longer able to live on his own. He uses a wheelchair which necessitated a home renovation in 2019. You had a wheelchair ramp installed outside the front entrance to your home and a new bathroom was added which can accommodate a wheelchair. The entire renovation cost $12,000. 12. The family's 2019 medical and dental expenses (excluding the private health care premiums), all of which were paid by you, were as follows: Yourself Nat Jane Joan John Robert Total $ 300 1,200 1,350 8,000 800 $ 900 3,200 1,800 6,200 2,500 4,500 $27.400 Your private health care plan reimbursed fifty percent (50%) of the above medical and dental expenses for you, Nat, Jane and Joan. 13. In 2019, you contributed $5,200 to various registered charitable organizations in Canada. 14. In 2019, you bought a raffle ticket from the social club at your place of employment and won a travel trailer that has a retail value of $34,000. You were able to sell the travel trailer for $38,000 in 2019. 15. Individual Information You Nat Jane Joan John Robert Birthdate June 1, 1974 April 1, 1972 March 1, 2016 May 5, 2000 July 5, 1998 February 28, 1937 Sin Student ID 527 000 345 527 657 315 527 657 319 527 657 321 527 000 079 Part A Calculate, for the 2019 taxation year, your minimum Net Income for Tax Purposes as per the Section 3 ordering rules. (Maximum marks - 48) You are 45 years-old and have a common-law spouse (Nat). Nat is 47 years old and is a school teacher employed by the Calgary Public School Board. Her net income in 2019 was $85,000. You have three children: Jane is 3 years old and attends a daycare program while you are both at work. Joan is 17 years old and has mental health problems. John is 21 years old and attends university on a full time basis for 10 months of the year. His tuition fees are $18,000. In 2019, Mark received a scholarship for $6,000 from your employer. For the past twenty years, you have been employed as a geologist by a large Canadian oil and gas company in Calgary, Alberta. During 2019, your basic gross salary amounts to $143,000. During 2019, your employer withheld the following amounts from your gross wages: $32,000 Federal income tax Employment Insurance premiums Canada Pension Plan contributions Registered pension plan contributions Disability insurance premiums Private health care premiums Shares of Saturday Ltd. Shares of Monday Ltd. Max Max Other Information: 1. In 2019, you also had the following shares transactions involving shares held in public corporations: Proceeds of Disposition $20,000 $10,000 5,400 700 1,200 Cost base and selling costs $15,000 $22,000 Capital Gain or (loss) $5,000 (12,000) 2. In 2019, you received $800 of eligible dividends from Saturday Ltd. 3. In October 2019, you withdrew $6,500 from your Registered Retirement Savings Plan (RRSP). 4. On January 15, 2019, you received options to buy 1,500 shares of your employer's common stock at a price of $20 per share. At that time the shares were trading at $18 per share. You exercised these options on July 6, 2019, when the shares were trading at $25 per share. You did not sell any of the shares during the year. 5. Your employer offers employee loans at a low interest rate of 3%. On April 1, 2019, you borrowed $42,000 from the employer to buy a new vehicle that you will be using for employment duties. The prescribed rates for each quarter in 2019 were as follows: Quarter 1-4% , Quarter 2-5%, Quarter 3-6%, Quarter 4-5%. 6. You are required to use your own vehicle for employment duties and have a signed form T2200 from your employer. The vehicle (class 10.1) was acquired on April 1, 2019 for $42,000 including GST. The company provided you with an allowance of 62 cents per kilometer driven for employment purposes. Your spent $5,600 for gas, oil and maintenance for your vehicle during 2019. The 2019 insurance and registration costs amounted to $2,200. In addition, in 2019, you drove the vehicle a total of 36,000 kilometers, of which 20,000 kilometers were carefully documented as employment-related travel. 7. During 2019, you received several gifts from your employer: • As is the case for all employer's senior staff, you received a $400 Amazon gift certificate. In recognition of 20 years of continuous service, you received a painting that had a retail value of $1,600. • At Christmas, all of the employees receive a gift certificate to buy a Christmas tree at a local tree farm. The estimated fair value of a Christmas tree is $100. 8. Your employer pays for family counselling services relating to mental health issues. The amount paid by the employer was $1,200. 9. Child care expenses for Jane amounted to $10,000 for 2019. 10. You made the following disbursements during the 2019: • • Fees paid to a financial planner Payment of premiums for life insurance Professional dues Contributions to an RRSP Tuition fee to attend a course needed for your employment** **Your employer reimbursed you for the tuition fees for the course. • • 11. Your father, Robert, lives with you. He is 82 years old and his 2019 Net Income for Tax Purposes is $18,900. Robert has numerous health issues and is no longer able to live on his own. He uses a wheelchair which necessitated a home renovation in 2019. You had a wheelchair ramp installed outside the front entrance to your home and a new bathroom was added which can accommodate a wheelchair. The entire renovation cost $12,000. 12. The family's 2019 medical and dental expenses (excluding the private health care premiums), all of which were paid by you, were as follows: Yourself Nat Jane Joan John Robert Total $ 300 1,200 1,350 8,000 800 $ 900 3,200 1,800 6,200 2,500 4,500 $27.400 Your private health care plan reimbursed fifty percent (50%) of the above medical and dental expenses for you, Nat, Jane and Joan. 13. In 2019, you contributed $5,200 to various registered charitable organizations in Canada. 14. In 2019, you bought a raffle ticket from the social club at your place of employment and won a travel trailer that has a retail value of $34,000. You were able to sell the travel trailer for $38,000 in 2019. 15. Individual Information You Nat Jane Joan John Robert Birthdate June 1, 1974 April 1, 1972 March 1, 2016 May 5, 2000 July 5, 1998 February 28, 1937 Sin Student ID 527 000 345 527 657 315 527 657 319 527 657 321 527 000 079 Part A Calculate, for the 2019 taxation year, your minimum Net Income for Tax Purposes as per the Section 3 ordering rules. (Maximum marks - 48)

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