Ms$.$ Henderson comes to you for advice in February $2024.$ Last year, $2023$ was a year of considerable change and turmoil for her. Her job in Ottawa, with Losing Ltd$.,$ evaporated on March $31,2023,$ as a result of a reorganization of the company's business after a merger with a competitor. She found another job in Dundas $($an improvement$),$ but it required her to move there. Her divorce from her former husband became final during $2022.$ Ms$.$ Henderson, who was already a single parent of a nine$-$year$-$old daughter, decided to adopt a five$-$year$-$old child locally on May $1$st of $2023.$ By June $2023,$ after completing her move to her new job, the adoption was finalized. The court costs, legal cost, and administrative costs were $$18,000.$

Other information on receipts and benefits:

Salary earned in $2023($$$44,000$ in Ottawa, $$50,000$ in Dundas$)$ $$94,000$

Profit from sale of cosmetics at home parties held in spare time $5,850$

Interest on saving accounts $1,800$

Spousal support made pursuant to a court order $($$$700$ per month for her support and $$550$ per month for the support of her daughter, age $9)15,000$

Moving allowance $7,500$

Dividends received $($eligible $$3,500$ and non$-$eligible $$2,000)5,500$

Proceeds from disposal a work of art $($original cost $$800)5,000$

Disbursements and withholdings:

Employment Insurance premium withheld $$1,002$

Canada Pension Plan contributions withheld $3,754$

Union dues $500$

Net rental loss $($for tax purposes$)$ on investment property $(4,800)$

Registered retirement savings plan contributions, made on February $14,2023(2022$ earned income was $$127,000)25,750$

Registered education savings plan payments $2023($$$60$ per month$)720$

Tuition fees for $4$ months part$-$time at a local University $3,800$

Payment on cancellation of lease for Ottawa apartment $580$

Security deposit on apartment in Dundas $475$

Gasoline and direct car expenses incurred in move to Dundas $120$

Trailer rental for move to Dundas $180$

Cost of shipping remainder of household effects $2,600$

Cost of hotel and meals in Dundas while awaiting delivery and unpacking of household effects $($one day$)220$

Payment to babysitter for care of both children after school and during school holidays $12,500$

Medical expense paid for family dental care $5,800$

Donations $($registered political party $$500$ and registered charities $$2,000)2,500$

A review of Ms$.$ Henderson's $2022$ tax return shows $$5,000$ net capital losses carried forward to $2023.$

$($Use tax rules applicable for $2023)$

A$.$ Calculate Ms$.$ Henderson's net income for tax purposes and taxable income for the $2023$ taxation year. Your must show all your calculations and explain any omitted items. Also, provide any further tax implications $/$ advice on RRSP$.$

B$.$ Regardless of what you calculated in Part A$,$ assume that Ms$.$ Henderson's net income for tax purposes and taxable income for $2023$ was actually $$108,000$ and all other information is the same. Calculate Ms$.$ Henderson's federal income tax for $2023.$

Answer rating: 100% (QA)

Part A Calculation of Ms Hendersons Net Income and Taxable Income for 2023 1 Calculation of Net Inco... View the full answer