445 Other Income, Other Deductions, And Other Issues Assignment Problems Assignment Problem Nine - 12 (Comprehensive Case Covering Chapters 1 to 9) Family Information Spencer James is 41 years old. He has been married to Suzanne James for over 20 years. The couple have three children. All members of the family are in good health. Information on the children is as follows: Charles And Charlene are 8 year old twins. During 2020, each of the twins received eligible dividends of $1,000 on public company shares that were gifted to them by their father in July 2019. At the time of the gift, each block of shares had a fair market value of $9,500. Spencer had acquired the two blocks of shares at a cost of $8,000 each. In December 2020, each twin sold the shares for $10,000 Charlton is 19 years old and attended university on a full time basis for four months of the year. Spencer and Suzanne pay his tuition fees of $6,300, along with textbook costs of $650. He has agreed to transfer the maximum amount of his tuition credit to his father. Charlton lives with Spencer and Suzanne. His only income for the year is from the sale of shares purchased from Spencer as described in the following text. In June 2020, Spencer sells shares with an adjusted cost base of $28,000 and a fair market value of $36,500 to his son, Charlton. In order to provide Charlton with money to buy a car and to create a capital loss for himself, he sells the shares to Charlton for $5,000. Charlton sells the shares in September for $42,000. Because of their work demands, Spencer and Suzanne have child care costs for the two twins of $250 per week for 48 weeks. During the remaining four weeks, the twins are sent to summer camp at a cost of $250 per child per week. Suzanne's Income Information Suzanne operates a mail order business out of rented space. As it is furnished business space, the business does not own any capital assets. For 2020, her net business income, calculated on the basis of tax rules, was $70,544. During 2020, Suzanne spent six consecutive weeks attending a specialized business accounting program at a designated educational institution. She received a tuition tax receipt that stated she had paid $2,000 in tuition fees mesidential rental property. This property had cost Spencer Employment informacion Spencer is employed by a Canadian public company. His annual salary 3108,700, none of which is commissions. He employer withhold the following amounts from his remuneration: El Premium $856 CPP Contributions 2890 Professional Association Dues 1.200 Registered Pension Plan Contributions 4.200 Spencer's employer mede a matching RPP contribution of $4,200 Because of his excelent performance during 2020, Spencer was awarded a bonus of $20,000 Of this total, $10,000 will be paid in 2020, with the balance being paid in June 2021. Spencer is provided with an automobile by his employer. The vehicle is based by the employer at a rate of $523 per month, including a payment of 551 per month for insurance. The automobile is available to Spencer for 11 months during 2020. During the remaining month, the employer required that it be returned to their garage. Total mileage for 2020 is 58.000 kilometres, only 5,000 of which are for personal use. On their birthday, Spencer's employer provides every employee with a $1.000 gift certificate that can be used for merchandise on Amazon. In addition, at Christmas, each employee receives a basket of gourmet food and wine. The value of this basket is $350 During 2020 Spencer spent $5.600 on meals and entertainment of his employer's customers The employer's policy is to reimburse 80 percent of these costs For the last 10 years, Spencer has worked in a rural office of his employer. The rural office is located 110 kilometres from the company's head office in a major Canadian city. As his family has become less enchanted with the country life style, Spencer has transferred to the company's city office. The move involves selling his rural home and acquiring a city home. The various cash outflows associated with the move are as follows: Real Estate Commissions - Old Home $11.620 Legal Fees - Old Home 1.250 Loss - Old Home 18.000 Unpaid Property Taxes - Old Home 625 Cleaning And Minor Repairs - Old Home Logal Fees New Home 1.460 Cost Of Moving Household Goods 3.460 While Spencer's employer does not provide a moving blowance the company agrees to com pensate him for his $18.000 10 on his old home as management expects him to spend the time he spent commuting at the office Other Information The lamy's medical expenses for 2020 ve as to $4600 Sponce San 8.500 4.700 Cheson 3.600 To Medicine $21,800 450 medcanons 10 min DOOR Othe Assignment Problems which is left to Spencer fother assets go to Spencer's mother and siblingal Information on the farm's assets is as follows: Land The farm land had an adjusted cost base of $250,000. At the time of the father's death the fair market value was $375,000 Building The building had a capital cost of $325,000, a fair market value at the time of the father's death of $275,000, and UCC of $253,000 Equipment The equipment had a capital cost $130,000, a fair market value at the time of death of $110.000, and UCC of $95.000. The executors of the father's estate elect to transfer the land at its fair market value in order to use up accumulated capital losses on other assets. The building and equipment are transferred at the UCC values. 3 As Spencer, and especially his family, have no interest in running a pig farm, he sells the inhented property to bus brother in March, as soon as he has title. His brother agrees to purchase the assets for the fair Sarket values determined by the executors, specifically $375,000 for the land, $275.000 has the building and $110,000 for the equipment 4 in memory of the ther. Spencer donates $8.400 or his father's birthday in 2020 to Hearts On Noses A Mini Pig Sanctuary This registered charity his preserve the lives of injured abused abandoned and neglected pot belied pigs 5. During 2020. Spencer makes = $4.000 contributon to his Tax Free Sings Account and $5.000 to Sunes. He also makes a $2.000 contribution 151.000 per child to the family Registered Education Savings Plan established for Charles and Charlene Required: Cetermine Suzanne fede alta payable and her platility for 2020 in acting Senastedene Payee that Spencers Tactile income exceeds $200.000 Tera Pyator 2020 cas de Gasconde 445 Other Income, Other Deductions, And Other Issues Assignment Problems Assignment Problem Nine - 12 (Comprehensive Case Covering Chapters 1 to 9) Family Information Spencer James is 41 years old. He has been married to Suzanne James for over 20 years. The couple have three children. All members of the family are in good health. Information on the children is as follows: Charles And Charlene are 8 year old twins. During 2020, each of the twins received eligible dividends of $1,000 on public company shares that were gifted to them by their father in July 2019. At the time of the gift, each block of shares had a fair market value of $9,500. Spencer had acquired the two blocks of shares at a cost of $8,000 each. In December 2020, each twin sold the shares for $10,000 Charlton is 19 years old and attended university on a full time basis for four months of the year. Spencer and Suzanne pay his tuition fees of $6,300, along with textbook costs of $650. He has agreed to transfer the maximum amount of his tuition credit to his father. Charlton lives with Spencer and Suzanne. His only income for the year is from the sale of shares purchased from Spencer as described in the following text. In June 2020, Spencer sells shares with an adjusted cost base of $28,000 and a fair market value of $36,500 to his son, Charlton. In order to provide Charlton with money to buy a car and to create a capital loss for himself, he sells the shares to Charlton for $5,000. Charlton sells the shares in September for $42,000. Because of their work demands, Spencer and Suzanne have child care costs for the two twins of $250 per week for 48 weeks. During the remaining four weeks, the twins are sent to summer camp at a cost of $250 per child per week. Suzanne's Income Information Suzanne operates a mail order business out of rented space. As it is furnished business space, the business does not own any capital assets. For 2020, her net business income, calculated on the basis of tax rules, was $70,544. During 2020, Suzanne spent six consecutive weeks attending a specialized business accounting program at a designated educational institution. She received a tuition tax receipt that stated she had paid $2,000 in tuition fees mesidential rental property. This property had cost Spencer Employment informacion Spencer is employed by a Canadian public company. His annual salary 3108,700, none of which is commissions. He employer withhold the following amounts from his remuneration: El Premium $856 CPP Contributions 2890 Professional Association Dues 1.200 Registered Pension Plan Contributions 4.200 Spencer's employer mede a matching RPP contribution of $4,200 Because of his excelent performance during 2020, Spencer was awarded a bonus of $20,000 Of this total, $10,000 will be paid in 2020, with the balance being paid in June 2021. Spencer is provided with an automobile by his employer. The vehicle is based by the employer at a rate of $523 per month, including a payment of 551 per month for insurance. The automobile is available to Spencer for 11 months during 2020. During the remaining month, the employer required that it be returned to their garage. Total mileage for 2020 is 58.000 kilometres, only 5,000 of which are for personal use. On their birthday, Spencer's employer provides every employee with a $1.000 gift certificate that can be used for merchandise on Amazon. In addition, at Christmas, each employee receives a basket of gourmet food and wine. The value of this basket is $350 During 2020 Spencer spent $5.600 on meals and entertainment of his employer's customers The employer's policy is to reimburse 80 percent of these costs For the last 10 years, Spencer has worked in a rural office of his employer. The rural office is located 110 kilometres from the company's head office in a major Canadian city. As his family has become less enchanted with the country life style, Spencer has transferred to the company's city office. The move involves selling his rural home and acquiring a city home. The various cash outflows associated with the move are as follows: Real Estate Commissions - Old Home $11.620 Legal Fees - Old Home 1.250 Loss - Old Home 18.000 Unpaid Property Taxes - Old Home 625 Cleaning And Minor Repairs - Old Home Logal Fees New Home 1.460 Cost Of Moving Household Goods 3.460 While Spencer's employer does not provide a moving blowance the company agrees to com pensate him for his $18.000 10 on his old home as management expects him to spend the time he spent commuting at the office Other Information The lamy's medical expenses for 2020 ve as to $4600 Sponce San 8.500 4.700 Cheson 3.600 To Medicine $21,800 450 medcanons 10 min DOOR Othe Assignment Problems which is left to Spencer fother assets go to Spencer's mother and siblingal Information on the farm's assets is as follows: Land The farm land had an adjusted cost base of $250,000. At the time of the father's death the fair market value was $375,000 Building The building had a capital cost of $325,000, a fair market value at the time of the father's death of $275,000, and UCC of $253,000 Equipment The equipment had a capital cost $130,000, a fair market value at the time of death of $110.000, and UCC of $95.000. The executors of the father's estate elect to transfer the land at its fair market value in order to use up accumulated capital losses on other assets. The building and equipment are transferred at the UCC values. 3 As Spencer, and especially his family, have no interest in running a pig farm, he sells the inhented property to bus brother in March, as soon as he has title. His brother agrees to purchase the assets for the fair Sarket values determined by the executors, specifically $375,000 for the land, $275.000 has the building and $110,000 for the equipment 4 in memory of the ther. Spencer donates $8.400 or his father's birthday in 2020 to Hearts On Noses A Mini Pig Sanctuary This registered charity his preserve the lives of injured abused abandoned and neglected pot belied pigs 5. During 2020. Spencer makes = $4.000 contributon to his Tax Free Sings Account and $5.000 to Sunes. He also makes a $2.000 contribution 151.000 per child to the family Registered Education Savings Plan established for Charles and Charlene Required: Cetermine Suzanne fede alta payable and her platility for 2020 in acting Senastedene Payee that Spencers Tactile income exceeds $200.000 Tera Pyator 2020 cas de Gasconde