It is February $15,2024,$ and you are visiting with your friends Carl and Ellie Fredricksen at their Calgary home. Carl is $63$ years old and Ellie is $65$ years old.

Carl: We have big news. Ellie and I are moving to Kelowna. We found a house near the lake that we take possession on March $1.$ We put our Calgary home on the market and it sold in September for $$842,000.$

You congratulate them but say that you will miss your friends.

Ellie: Hopefully you can come visit often. Carl is going to retire but I am going to work part time at a knitting store. It$$s going to be an expensive move. I sure hope we can claim some moving expenses.

You state that there are some criteria that must be met to claim moving expenses and you would be happy to prepare an analysis to see if they qualify. You will also explain any restrictions that may impact them.

Carl: I$$m hoping that we don$$t have to pay taxes on the sale of our Calgary house. I$$m the sole owner and I$$ve never claimed the principal residence exemption. I bought the house in $2015$ for $$630,000.$ Ellie claimed the principal residence exemption for the years $2010$ to $2017$ when she sold a cottage she owned. Could you determine if any of the gain on the house will be taxable?

You reply that you will prepare a schedule to calculate this.

Carl: Great. We used some of the house proceeds to purchase another rental property, a condo in downtown Calgary. We also still have the Okotoks townhouse we$$ve been renting. Could you determine the tax impact of our rental properties for $2023.$ Here is all the information $($Exhibit $1).$

Ellie: We were also hoping you could help our son Russell. His spouse Lisa went back to university last fall since their son Dug is now in Grade $7.$ They used an after$-$school day care program while Russell was working and Lisa was at school. However, a friend told Russell that they won$$t be able to claim any childcare expenses because Lisa had no income. Is that true?

You answer that you will explain how the childcare expense deduction is determined and conclude on whether Russell or Lisa can claim anything for Dug.

Ellie: That would be helpful. Also, we gave Russell $$50,000$ from the house proceeds so he and Lisa could invest it$.$ However, they don$$t know what tax plan would be best for their needs. Russell gave me a note on their financial situation $($Exhibit $2).$ We were hoping you would be able to provide a recommendation.

You state that this is common request and you will be happy to do this.

Carl: Great. Finally, would you mind coming up with an estimated of the taxes we are going to owe in April when we file our $2023$ tax returns? It would really help us budget for all these life changes. I have our information here $($Exhibit $3).$

You think to yourself that this is a lot of work but reply to Carl and Ellie that you are happy to help.

Exhibit $3$

Personal Tax Information for Carl and Ellie

Carl retired on October $31,2023.$ We received his T$4$ slip for the year which showed his employment income of $$129,000$ with deductions of $$3,754$ for CPP$,$ $$1,002$ for EI and $$19,800$ for federal taxes. His monthly pension is $$4,400$ less federal income tax of $$860,$ which started in November. Carl also had a $$43,000$ net capital loss carry forward from $2020.$

Ellie received $$12,000$ of CPP benefits and $$900$ of Old Age Security in $2023.$ Ellie also has the following assets.

$3$ year Bonds $-$ Ellie purchased $$10,000$ face value of bonds for $$10,900$ on September $1,2023.$ The bonds have a stated rate of $9\%$ and an effective rate of $8\mathrm{.}75\%.$ Interest is paid annually each September $1.$

Helium Shares $-$ Ellie owned $600$ shares of Helium, a Cdn public company, with an ACB of $$15,000$ on January $1,2023.$ On March $1,$ she gave $300$ shares to Carl, $200$ shares to Russell and $100$ shares to Dug. The shares were trading for $$32$ per share on that day. On July $1,$ a dividend of $$4\mathrm{.}25$ per share was paid to shareholders. Carl, Russell and Dug sold all their shares on November $18$ when the shares were trading at $$45$ per share.

Balloon Shares $-$ Ellie owned $10,000$ shares with an ACB of $$25,000$ in her brother$$s qualified small business corporation on January $1,2023.$ The company was purchased by a large international company for $$106$ per share in August.

Q$1.$ Determine minimum Net Income for Tax Purposes, Taxable Income, Federal Taxes Payable and Net Federal Taxes Owing for the $2023$ taxation year for Carl and Elliee. Ignore any Alternative Minimum Tax, GST or PST considerations. For any amounts provided but excluded from your calculations explain why they have been excluded. Also, provide any carryover amounts, if any, at the end of the year.