Mr. Buddy Musician (SIN 527-000-061) was born in Vancouver on August 28, 1955. He has spent...

   

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Mr. Buddy Musician (SIN 527-000-061) was born in Vancouver on August 28, 1955. He has spent most of his working life as a pianist and song writer. He and his family live at 111 WWW Street, Vancouver, B.C. V4H 3W4, phone (604) 111-1111. Mr. Musician's wife, Natasha (SIN 527-000-129), was born on June 6, 1997. She and Mr. Musician have six children: four biological and two adopted. Each biological child was born on April 1 of the following years: Linda, 2017; Larry, 2018; Donna, 2019; and Donald, 2020. None of these children have any income of their own in 2022 Natasha's only income in 2022 is $3,200 from singing engagements. Buddy and Natasha's son Richard (SIN 527-000-285) was born on March 15, 2005, and has income of $2,800 for the year. Due to his accelerated schooling, he started full-time attendance at university in September of 2022 at the age of 17. His first semester tuition fee is $3,000. These amounts are paid by Mr. Musician. Their other child, Sarah, was born on September 2, 2002, and was in full-time attendance at university for all of 2021 (including a four-month full-time summer session). Her tuition is $9,600. These amounts are also paid by Mr. Musician. Sarah has no income during for 2002. Neither Richard nor Sarah will have any income in the next three years. They both have agreed that the maximum tuition amount should be transferred to their father. Mr. Musician's mother, Eunice, was born on April 10, 1935, and his father, Earl, was born on November 16, 1933. They both live with Mr. Musician and his wife. While his father has some mobility issues, he is not infirm. His mother is legally blind. Eunice Musician had income of $9,500 for the year, while Earl Musician had income of $7,500. Other information concerning Mr. Musician and his family for 2022 is as follows: 1. Mr. Musician earned $16,500 for work as the house pianist at the Loose Moose Pub. His T4 showed that his employer withheld $500 for income tax and $280.70 for El. 2 During the year, Mr. Musician made his annual $3,000 donation to Planned Parenthood of Canada, a registered Canadian charity. 3. Mr. Musician has been married before to Lori Musician (SIN 527-000-319). Lori is 52 years old and lives in Fort Erie, Ontario. 4. Mr. Musician has two additional children who live with their mother, Ms. Dolly Nurse (SIN 527- 1-582), in Burnaby, British Columbia. The children are Megan Nurse, aged 12, and Andrew Nurse, aged 14. Neither child has any income in 2022 While Ms. Nurse and Mr. Musician were never married, Mr. Musician acknowledges that he is the father of both children. Although he has provided limited financial aid by paying their dental and medical expenses, the children are not dependent on Mr. Musician for support. 5. Mr. Musician wishes to claim all his medical expenses on a calendaryear basis. On December 2, 2022, Mr. Musician paid dental expenses to Canada Wide Dental Clinics for the following individuals: Himself Natasha (wife) Richard (adopted son) Sarah (adopted daughter) Linda (daughter) Earl (father) Lori (ex-wife) Dolly Nurse (mother of two of his children) Megan Nurse (daughter of Dolly Nurse) Total $1,200 700 800 300 100 1,050 300 675 550 $5,675 6. Mr. Musician signed a contract with Fred Nesbitt on January 13, 2022p make permanent modifications to his house. The contract was for the installation of ramps with sturdy hand railings outside his front and back doors to give his parents easier access to the house and modifications to their bathroom so they would be less likely to fall when using the shower The contract price was $5,800. As neither of his parents has a severe and prolonged mobility impairment, these expenditures are not eligible medical expenses. 7. Mr. Musician paid four quarterly instalments of $1,000 each (total of $4,000) for 2022, as requested on his instalment reminders from the CRA. He paid each instalment on the due date. 8. Mr. Musician receives $7,486.71 in OAS payments and $5,500 in CPP "retirement benefit" payments over 12 months. There was no tax shown as withheld on his T4A(OAS) or his T4A(P). 9. Mr. Musician builds a state-of-the-art home theatre in a new extension of his home. In order to finance it, he sells stock in his RRSP and withdraws the funds from his RRSPIs T4RSP showed $52,000 in withdrawals from the House of Rock Bank (Box 22) and total tax of $15,600 deducted from these payments (Box 34). 10. Several of Mr. Musician's songs have provided him with substantial royalty payments over the years. In 2022, the Never Say Die Record Company paid him $78,000 in royalty payments. No T5 was issued by the company. Mr. Musician had carried on a songwriting business for many years but had gradually reduced the time devoted to the endeavour However, in order to ensure the financial security of his family, Mr. Musician decided to accelerate his involvement by committing additional time to songwriting. On November 1, 2022 he rented a small, quiet studio for $700 a month and purchased a Roland electric piano for $7,750 that was delivered there. He does not plan to use the space or piano for personal enjoyment, only for composing. 12. 11. The previous year, on January 2, 2021, Mr. Musician elected not to make any further CPP contributions on his income from carrying on a business. 13. Mr. Musician is required by a court order to pay spousal support of $400 per month to his former spouse, Lori Musician. Mr. Musician made spousal support payments of $4,800 in 2022 14. Mr. Musician is required by a court order to make child support payments of $350 per month to Dolly Nurse for his two children, Megan and Andrew Nurse. A total of $4,200 was paid in 2022 15. Mr. Musician made contributions to the federal Liberal Party, a registered Canadian political party, in the amount of $610 during the year. 16. Mr. Musician made a $5,000 contribution to his TFSA during the year. Thanks to the excellent investing advice of his gardener, the balance in his TFSA account has grown to more than $175,000 by the end of the year. 17. Mr. Musician agrees to provide information with respect to Elections Canada. In addition Mr. Musician did not own foreign property in excess of $100,000 Canadian at any time in the year, did not own an interest in a foreign affiliate at any time in the year and did not dispose of a principal residence at any time in the year. 18. Mr. Musician's unused RRSP deduction room at the end of 2021 was nil and there were no undeducted RRSP contributions. Required: With the objective of minimizing Mr. Musician's income tax payable or increasing an income tax refund, prepare Mr. Musician's 2022 income tax return using the ProFile tax software program assuming Natasha does not file an income tax return. List any assumptions you have made and any notes and tax planning issues you feel should be placed in the file. Ignore any GST/ HST implications. Mr. Buddy Musician (SIN 527-000-061) was born in Vancouver on August 28, 1955. He has spent most of his working life as a pianist and song writer. He and his family live at 111 WWW Street, Vancouver, B.C. V4H 3W4, phone (604) 111-1111. Mr. Musician's wife, Natasha (SIN 527-000-129), was born on June 6, 1997. She and Mr. Musician have six children: four biological and two adopted. Each biological child was born on April 1 of the following years: Linda, 2017; Larry, 2018; Donna, 2019; and Donald, 2020. None of these children have any income of their own in 2022 Natasha's only income in 2022 is $3,200 from singing engagements. Buddy and Natasha's son Richard (SIN 527-000-285) was born on March 15, 2005, and has income of $2,800 for the year. Due to his accelerated schooling, he started full-time attendance at university in September of 2022 at the age of 17. His first semester tuition fee is $3,000. These amounts are paid by Mr. Musician. Their other child, Sarah, was born on September 2, 2002, and was in full-time attendance at university for all of 2021 (including a four-month full-time summer session). Her tuition is $9,600. These amounts are also paid by Mr. Musician. Sarah has no income during for 2002. Neither Richard nor Sarah will have any income in the next three years. They both have agreed that the maximum tuition amount should be transferred to their father. Mr. Musician's mother, Eunice, was born on April 10, 1935, and his father, Earl, was born on November 16, 1933. They both live with Mr. Musician and his wife. While his father has some mobility issues, he is not infirm. His mother is legally blind. Eunice Musician had income of $9,500 for the year, while Earl Musician had income of $7,500. Other information concerning Mr. Musician and his family for 2022 is as follows: 1. Mr. Musician earned $16,500 for work as the house pianist at the Loose Moose Pub. His T4 showed that his employer withheld $500 for income tax and $280.70 for El. 2 During the year, Mr. Musician made his annual $3,000 donation to Planned Parenthood of Canada, a registered Canadian charity. 3. Mr. Musician has been married before to Lori Musician (SIN 527-000-319). Lori is 52 years old and lives in Fort Erie, Ontario. 4. Mr. Musician has two additional children who live with their mother, Ms. Dolly Nurse (SIN 527- 1-582), in Burnaby, British Columbia. The children are Megan Nurse, aged 12, and Andrew Nurse, aged 14. Neither child has any income in 2022 While Ms. Nurse and Mr. Musician were never married, Mr. Musician acknowledges that he is the father of both children. Although he has provided limited financial aid by paying their dental and medical expenses, the children are not dependent on Mr. Musician for support. 5. Mr. Musician wishes to claim all his medical expenses on a calendaryear basis. On December 2, 2022, Mr. Musician paid dental expenses to Canada Wide Dental Clinics for the following individuals: Himself Natasha (wife) Richard (adopted son) Sarah (adopted daughter) Linda (daughter) Earl (father) Lori (ex-wife) Dolly Nurse (mother of two of his children) Megan Nurse (daughter of Dolly Nurse) Total $1,200 700 800 300 100 1,050 300 675 550 $5,675 6. Mr. Musician signed a contract with Fred Nesbitt on January 13, 2022p make permanent modifications to his house. The contract was for the installation of ramps with sturdy hand railings outside his front and back doors to give his parents easier access to the house and modifications to their bathroom so they would be less likely to fall when using the shower The contract price was $5,800. As neither of his parents has a severe and prolonged mobility impairment, these expenditures are not eligible medical expenses. 7. Mr. Musician paid four quarterly instalments of $1,000 each (total of $4,000) for 2022, as requested on his instalment reminders from the CRA. He paid each instalment on the due date. 8. Mr. Musician receives $7,486.71 in OAS payments and $5,500 in CPP "retirement benefit" payments over 12 months. There was no tax shown as withheld on his T4A(OAS) or his T4A(P). 9. Mr. Musician builds a state-of-the-art home theatre in a new extension of his home. In order to finance it, he sells stock in his RRSP and withdraws the funds from his RRSPIs T4RSP showed $52,000 in withdrawals from the House of Rock Bank (Box 22) and total tax of $15,600 deducted from these payments (Box 34). 10. Several of Mr. Musician's songs have provided him with substantial royalty payments over the years. In 2022, the Never Say Die Record Company paid him $78,000 in royalty payments. No T5 was issued by the company. Mr. Musician had carried on a songwriting business for many years but had gradually reduced the time devoted to the endeavour However, in order to ensure the financial security of his family, Mr. Musician decided to accelerate his involvement by committing additional time to songwriting. On November 1, 2022 he rented a small, quiet studio for $700 a month and purchased a Roland electric piano for $7,750 that was delivered there. He does not plan to use the space or piano for personal enjoyment, only for composing. 12. 11. The previous year, on January 2, 2021, Mr. Musician elected not to make any further CPP contributions on his income from carrying on a business. 13. Mr. Musician is required by a court order to pay spousal support of $400 per month to his former spouse, Lori Musician. Mr. Musician made spousal support payments of $4,800 in 2022 14. Mr. Musician is required by a court order to make child support payments of $350 per month to Dolly Nurse for his two children, Megan and Andrew Nurse. A total of $4,200 was paid in 2022 15. Mr. Musician made contributions to the federal Liberal Party, a registered Canadian political party, in the amount of $610 during the year. 16. Mr. Musician made a $5,000 contribution to his TFSA during the year. Thanks to the excellent investing advice of his gardener, the balance in his TFSA account has grown to more than $175,000 by the end of the year. 17. Mr. Musician agrees to provide information with respect to Elections Canada. In addition Mr. Musician did not own foreign property in excess of $100,000 Canadian at any time in the year, did not own an interest in a foreign affiliate at any time in the year and did not dispose of a principal residence at any time in the year. 18. Mr. Musician's unused RRSP deduction room at the end of 2021 was nil and there were no undeducted RRSP contributions. Required: With the objective of minimizing Mr. Musician's income tax payable or increasing an income tax refund, prepare Mr. Musician's 2022 income tax return using the ProFile tax software program assuming Natasha does not file an income tax return. List any assumptions you have made and any notes and tax planning issues you feel should be placed in the file. Ignore any GST/ HST implications.

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I can provide guidance on how to approach the completion of Mr Musicians income tax return but I wont be able to actually fill out the forms for you H... View the full answer