Today is February 6, 2021. Sydney Rowe, a Chartered Professional Accountant, moved from Vancouver to Ottawa...

 

Transcribed Image Text:

Today is February 6, 2021. Sydney Rowe, a Chartered Professional Accountant, moved from Vancouver to Ottawa in January 2020 to take up a job working for the Government of Canada. The following are details about what took place during the 2020 year. Sydney earned employment income of $100,000 during the year. She also did some consulting work on the side and earned $16,000. She incurred about $3,000 of expenses related to this business income. She opened a non-registered brokerage account with Questrade in 2018. In February 2020 Sydney purchased 10 shares of Tesla (TSLA) for $160/share. She sold her 10 shares in December 2020 for $613/share. In December 2020 she purchased 227 shares of Palantir Technologies (PLTR) for $27/share and on December 31, 2020 PLTR was trading at $48/share. She is very pleased with her increased wealth due to these trades. Tesla issued a large dividend in July 2020 providing a dividend of $100/share to shareholders. Sydney took some advice from strangers on reddit and lost some money trading Gamestop (GME) - she had capital losses of $1,000 from this trade. She had a net capital loss carryover of $2,800 from a bad investment in 2019. Sydney earned a total of $48 of interest on her chequing and savings accounts combined. Her bank did not send her a T5 slip. She had deductible moving expenses of $2,800. Sydney contributed $2,000 to her RRSP, $2,500 to her child's RESP and $6,000 to her TFSA during the year. She withdrew $500 from an old RRSP account that was sitting with a bank that she doesn't use anymore. Sydney's husband, Adrian, is a professor at the University of Ottawa and he earned $120,000 during the year. Sydney rented her basement to a friend who paid her $12,000 for the year. The expenses related to the portion of the house rented were $13,000. Required: A) Calculate Sydney's net income for tax purposes, using the calculation structure we learned in class (e.g. 3(a), 3(b), etc)). Make sure you briefly explain why any amounts have been omitted from your calculations / where that amount may belong instead (if at all). B) Calculate Sydney's taxable income and any net capital loss balances. C) Calculate the federal tax payable by applying the federal tax brackets. D) When are Sydney and Adrian's tax returns due to be filed by? E) Assume Sydney's ending tax owing is $10,000. She is wondering what the interest and/or penalty will be if she files on time but doesn't pay her balance owing until June 20, 2021. Assume the 2020 Q4 prescribed rate continues into 2021. Today is February 6, 2021. Sydney Rowe, a Chartered Professional Accountant, moved from Vancouver to Ottawa in January 2020 to take up a job working for the Government of Canada. The following are details about what took place during the 2020 year. Sydney earned employment income of $100,000 during the year. She also did some consulting work on the side and earned $16,000. She incurred about $3,000 of expenses related to this business income. She opened a non-registered brokerage account with Questrade in 2018. In February 2020 Sydney purchased 10 shares of Tesla (TSLA) for $160/share. She sold her 10 shares in December 2020 for $613/share. In December 2020 she purchased 227 shares of Palantir Technologies (PLTR) for $27/share and on December 31, 2020 PLTR was trading at $48/share. She is very pleased with her increased wealth due to these trades. Tesla issued a large dividend in July 2020 providing a dividend of $100/share to shareholders. Sydney took some advice from strangers on reddit and lost some money trading Gamestop (GME) - she had capital losses of $1,000 from this trade. She had a net capital loss carryover of $2,800 from a bad investment in 2019. Sydney earned a total of $48 of interest on her chequing and savings accounts combined. Her bank did not send her a T5 slip. She had deductible moving expenses of $2,800. Sydney contributed $2,000 to her RRSP, $2,500 to her child's RESP and $6,000 to her TFSA during the year. She withdrew $500 from an old RRSP account that was sitting with a bank that she doesn't use anymore. Sydney's husband, Adrian, is a professor at the University of Ottawa and he earned $120,000 during the year. Sydney rented her basement to a friend who paid her $12,000 for the year. The expenses related to the portion of the house rented were $13,000. Required: A) Calculate Sydney's net income for tax purposes, using the calculation structure we learned in class (e.g. 3(a), 3(b), etc)). Make sure you briefly explain why any amounts have been omitted from your calculations / where that amount may belong instead (if at all). B) Calculate Sydney's taxable income and any net capital loss balances. C) Calculate the federal tax payable by applying the federal tax brackets. D) When are Sydney and Adrian's tax returns due to be filed by? E) Assume Sydney's ending tax owing is $10,000. She is wondering what the interest and/or penalty will be if she files on time but doesn't pay her balance owing until June 20, 2021. Assume the 2020 Q4 prescribed rate continues into 2021.

Answer rating: 100% (QA)

A Calculate Sydneys net income for tax purposes using the calculation structure we learned in class eg 3a 3b etc Make sure you briefly explain why any ... View the full answer