Outovit formally separated from her husband late in 2020. Custody of her threechildren, ages 14, 10, and 7, was granted to her as part of an agreement (properly referenced to the Income Tax Act, as necessary) that was worked out with her husband in Family Court. The oldest child, Real, is 20 years old and, therefore, not part of the agreement, although he lives with her and the other children. To make a fresh start, on January 15, 2021, she resigned from her position in Elmira, Ontario, where she had been employed by the same employer since November 2003. She took a position in Dundas, Ontario, about 65 kilometres away.

Ms. Outovit had always prepared her own tax return in previous years, but because of the extraordinary events of 2020 and 2021, she is having some difficulty with the preparation of her return. She has come to you for help, having already correctly calculated her income under Subdivisions a, b, and c of Division B, as follows:

Transcribed Image Text:

Subdivision a Salary (from both employers in 2021) Taxable group term life insurance premium (paid by both employers in 2021) Taxable car benefit Deductible professional fees Deductible RPP contributions (defined benefit plans) Net Subdivision a income Subdivision b Business income (loss) from partnership share (drawings from partnership in both years: $4,000) Property income: Net rental income (loss) from apartment building (loss is before CCA) Grossed-up dividends from active business income of a CCPC Savings Bond interest Deductible interest on loan to buy shares Net Subdivision b income $ 86,500 $ 95,000 450 495 4,350 5,000 (350) (400) (4,800) (5,500) $ 86,150 $ 94,595 $ (1,000) $ 6,000 10,050 (2,000) 1,100 1,200 3,300 3,500 (200) (200) $ 13,250 $ 8,500 Subdivision c Taxable capital gain on sale of shares Taxable capital gain on sale of cottage Taxable capital gain on sale of painting Net Subdivision c income Total income from above sources $ 6,200 $ 6,500 8,000 1,200 $ 6,200 $ 15,700 $ 105,600 $118,795 Subdivision a Salary (from both employers in 2021) Taxable group term life insurance premium (paid by both employers in 2021) Taxable car benefit Deductible professional fees Deductible RPP contributions (defined benefit plans) Net Subdivision a income Subdivision b Business income (loss) from partnership share (drawings from partnership in both years: $4,000) Property income: Net rental income (loss) from apartment building (loss is before CCA) Grossed-up dividends from active business income of a CCPC Savings Bond interest Deductible interest on loan to buy shares Net Subdivision b income $ 86,500 $ 95,000 450 495 4,350 5,000 (350) (400) (4,800) (5,500) $ 86,150 $ 94,595 $ (1,000) $ 6,000 10,050 (2,000) 1,100 1,200 3,300 3,500 (200) (200) $ 13,250 $ 8,500 Subdivision c Taxable capital gain on sale of shares Taxable capital gain on sale of cottage Taxable capital gain on sale of painting Net Subdivision c income Total income from above sources $ 6,200 $ 6,500 8,000 1,200 $ 6,200 $ 15,700 $ 105,600 $118,795