ACCT 411 Personal Corporate Taxation Review Problem Test 3 November 9, 2021 This Question is also available in the Excel Workbook Mr LudwigBeethovenwasborninVictoriaonAugust 28, 1953 He has spent most of his working life as a pianistandsongwriter Heandhisfamilylivein Vancouver, British Columbia Mr Beethoven's wife, Madonna, was born on June 2,1995 She and Mr Beethoven have four children Each child was bornon April 1 of the following years, Beyonce, 2015 Bowie, 2016 Adele 2017 and Elvis, 2018 Madonnas only income during 2020 is $3,200fromsingingengagements Ludwig and Madonna Beethoven have two adopted children MozartwasbornonMarch15,2003, andhasincomeof$2,800fortheyear Duetohisacceleratedschooling,hestartedfull timeattendance at university in September of 2020 at the age of 17 His firstsemester tuitionfeeis$3,000 Mr Beethovenpaystheseamounts Theotheradoptedchild,Janet,wasbornonSeptember2,2000,andisinfull time attendanceatuniversityforallof2020(includingafour monthsummer session) Her tuition is $9,600 Mr Beethovenalsopaystheseamounts Janethasnoincomeduringtheyear Neither Mozart nor Janet will have any income in the next three years They both have agreed that the maximum tuition amount should betransferredtotheirfather Assume that they will not be file income tax returns to take advantage of the Canada training credit Mr Beethoven's mother, Eunice, was born on April 10, 1933, and hisfather,Johann,wasbornonNovember16,1931 TheybothlivewithMr Beethoven and his wife While his father has some mobility issues, he is not infirm Hismotherislegallyblind EuniceBeethovenhadincomeof$9,500 for theyear,whileJohannBeethoven hadincome of$7,500 OtherinformationconcerningMr Beethovenandhisfamilyfor2020isasfollows Mr Beethoven earned $16,500 for work as the house pianist at theViennaCoffeeGallery HisT4showedthathisemployerwithheld$500forincometaxesand$281 forEl NoCPPwaswithheldas he haspreviouslyfiledanelectiontostopcontributingtotheCPP Duringtheyear,Mr Beethovenmadehisannual$3,000donationtoPlannedParenthoodofCanada,aregisteredCanadiancharity Mr Beethoven has been married before to Brianna Beethoven Briannais52yearsoldandlivesinFortErie,Ontario Mr Beethovenhastwoadditionalchildrenwholivewiththeirmother, Ms Janis Joplin,in Burnaby, BritishColumbia The children are Lana Joplin, aged 12 and Jimmy Joplin,aged 14 Neither chi Id has any income during 2020 While Ms JoplinandMr Beethovenwerenevermarried,Mr Beethovenacknowledgesthatheisthefatherofbothchildren AlthoughLudwighas provided limited financial aid by paying their dental and medicalexpenses,thechildrenarenotdependentonLudwigforsupport Mr Beethovenwishestoclaimallhismedicalexpensesonacalendar year basis On December 2, 2020, Mr Beethoven paiddental expenses to Canada Wide Dental Clinics for the followingindividuals Himself $1,200 Madonna(wife) 700 Mozart(adoptedson) 800 Janet(adopteddaughter) 300 Beyonce(daughter) 100 Johann(father) 1,050 Brianna(ex wife) 300 JanisJoplin(motheroftwoofhischildren) 675 JimmyJoplin(son ofJanisJoplin) 550 Total $5675 Mr Beethoven signed a contract with Fred Nesbitt on January 13,2020, to do permanent modifications for better accessibility to his house The contract wasfortheinstallationoframpswithsturdyhandrailingsoutsidehisfrontand back doors to give his parents easier access to the house andmodifications to their bathroom so they would be less Iikely to falIwhenusingtheshower Thecontractpricewas$5,800 Asneitherofhis parents has a severe and prolonged mobility impairment,theseexpendituresarenoteligiblemedicalexpenses Mr Beethoven paid four quarterly instalments of $1,000 each (totalof $4,000) for 2020, as requested on his Instalment Reminders fromtheCRA Hepaideachinstalmentontheduedate Mr Beethoven receives $7,270 in Old Age Security (OAS) paymentsand $5,500 in Canada Pension Plan (CPP) retirement benefit paymentsover 12 months There was no tax shown as withheld for either OAS or CPP payments made to Mr Beethoven Mr Beethovenbuildsastate of the arthometheatreinanewextension of his home In order to finance it, he sells stock in hisRRSPandwithdrawsthefunds fromhisRRSP He withdrew$52,000 and theHouse of Rock Bank withheld totaltaxof$15,600from this withdrawal Several ofMr Beethoven's songs,including his outstanding hit, Symphony No 5 in C Minor , have provided him with substantialroyaltypaymentsovertheyears In2020,theNeverSayDie Record Co paidhim$78,000inroyaltypayments This is considered as business income In order to ensure the financial security of his family, Mr Beethovendecidedtoreturntosongwritinginearnest OnNovember1,2020,he rented a small, quiet studio for $700 a month and purchased aRoland electric piano for $7,750 (hint capital assetClass 8) that was delivered there He doesnot plan to use the space or piano for personal enjoyment, only forcomposing This is considered as part of his business income The previous year, on January 2, 2019,Mr Beethoven elected nottomakeanyfurtherCPPcontributionsonhis self employedincome Mr Beethovenisrequiredbyacourtordertopayspousalsupportof $400 per month to his former spouse, Brianna Beethoven Mr Beethovenmadespousalsupportpaymentsof$4,800during2020 Mr Beethoven is required by a court order to make child supportpayments of $350 per month for his two children, Lana and JimmyJoplin Atotalof$4,200waspaidduringtheyear Mr Beethoven contributed to the Federal Liberal Party for $610duringtheyear Mr Beethoven made a $5,000 contribution to his TFSA during theyear Thanks to the excellent investing advice of his gardener, thebalance in his TFSA account has grown to more than $175,000 bytheendoftheyear Required WiththeobjectiveofminimizingMr Beethoven'sTaxPayable, prepare Mr Beethoven's 2020 income tax return using the Excel Worksheet provided

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ACCT 411 Personal & Corporate Taxation Review Problem Test #3 November 9, 2021 This Question is also available in the Excel Workbook Mr.LudwigBeethovenwasborninVictoriaonAugust 28, 1953.

ACCT 411

Personal & Corporate Taxation Review Problem

Test #3 November 9, 2021

This Question is also available in the Excel Workbook

Mr.LudwigBeethovenwasborninVictoriaonAugust 28, 1953. He has spent most of his working life as a pianistandsongwriter.Heandhisfamilylivein Vancouver, British Columbia.

Mr. Beethoven's wife, Madonna, was born on June 2,1995. She and Mr. Beethoven have four children. Each child was bornon April 1 of the following years, Beyonce, 2015;Bowie, 2016;Adele 2017; and Elvis, 2018. Madonnas only income during 2020 is $3,200fromsingingengagements.

Ludwig and Madonna Beethoven have two adopted children. MozartwasbornonMarch15,2003, andhasincomeof$2,800fortheyear.Duetohisacceleratedschooling,hestartedfull-timeattendance at university in September of 2020 at the age of 17. His firstsemester tuitionfeeis$3,000. Mr.Beethovenpaystheseamounts.

Theotheradoptedchild,Janet,wasbornonSeptember2,2000,andisinfull-time

attendanceatuniversityforallof2020(includingafour-monthsummer session). Her tuition

is $9,600. Mr.Beethovenalsopaystheseamounts.Janethasnoincomeduringtheyear.

Neither Mozart nor Janet will have any income in the next three years.They both have agreed that the maximum tuition amount should betransferredtotheirfather. Assume that they will not be file income tax returns to take advantage of the Canada training credit.

Mr. Beethoven's mother, Eunice, was born on April 10, 1933, and hisfather,Johann,wasbornonNovember16,1931. TheybothlivewithMr.Beethoven and his wife. While his father has some mobility issues, he is not infirm.Hismotherislegallyblind.EuniceBeethovenhadincomeof$9,500 for theyear,whileJohannBeethoven hadincome of$7,500.

OtherinformationconcerningMr.Beethovenandhisfamilyfor2020isasfollows:

Mr. Beethoven earned $16,500 for work as the house pianist at theViennaCoffeeGallery.HisT4showedthathisemployerwithheld$500forincometaxesand$281

forEl.NoCPPwaswithheldas he haspreviouslyfiledanelectiontostopcontributingtotheCPP.

Duringtheyear,Mr.Beethovenmadehisannual$3,000donationtoPlannedParenthoodofCanada,aregisteredCanadiancharity.

Mr. Beethoven has been married before to Brianna Beethoven.Briannais52yearsoldandlivesinFortErie,Ontario.

Mr.Beethovenhastwoadditionalchildrenwholivewiththeirmother, Ms. Janis Joplin,in Burnaby, BritishColumbia. The children are Lana Joplin, aged 12 and Jimmy Joplin,aged 14. Neither chi Id has any income during 2020. While Ms.JoplinandMr.Beethovenwerenevermarried,Mr.Beethovenacknowledgesthatheisthefatherofbothchildren.AlthoughLudwighas provided limited financial aid by paying their dental and medicalexpenses,thechildrenarenotdependentonLudwigforsupport.

Mr.Beethovenwishestoclaimallhismedicalexpensesonacalendar year basis. On December 2, 2020, Mr. Beethoven paiddental expenses to Canada Wide Dental Clinics for the followingindividuals:

Himself	$1,200
Madonna(wife)	700
Mozart(adoptedson)	800
Janet(adopteddaughter)	300
Beyonce(daughter)	100
Johann(father)	1,050
Brianna(ex-wife)	300
JanisJoplin(motheroftwoofhischildren)	675
JimmyJoplin(son ofJanisJoplin)	550
Total $5675

Mr. Beethoven signed a contract with Fred Nesbitt on January 13,2020, to do permanent modifications for better accessibility to his house. The contract wasfortheinstallationoframpswithsturdyhandrailingsoutsidehisfrontand back doors to give his parents easier access to the house andmodifications to their bathroom so they would be less Iikely to falIwhenusingtheshower.Thecontractpricewas$5,800.Asneitherofhis parents has a severe and prolonged mobility impairment,theseexpendituresarenoteligiblemedicalexpenses.
Mr. Beethoven paid four quarterly instalments of $1,000 each (totalof $4,000) for 2020, as requested on his Instalment Reminders fromtheCRA.Hepaideachinstalmentontheduedate.

Mr. Beethoven receives $7,270 in Old Age Security (OAS) paymentsand $5,500 in Canada Pension Plan (CPP) "retirement benefit" paymentsover 12 months. There was no tax shown as withheld for either OAS or CPP payments made to Mr. Beethoven.

Mr.Beethovenbuildsastate-of-the-arthometheatreinanewextension of his home. In order to finance it, he sells stock in hisRRSPandwithdrawsthefunds fromhisRRSP.He withdrew$52,000 and theHouse of Rock Bank withheld totaltaxof$15,600from this withdrawal.

Several ofMr. Beethoven's songs,including his outstanding hit,"Symphony No. 5 in C Minor", have provided him with substantialroyaltypaymentsovertheyears.In2020,theNeverSayDie Record Co. paidhim$78,000inroyaltypayments.This is considered as business income.

In order to ensure the financial security of his family, Mr. Beethovendecidedtoreturntosongwritinginearnest.OnNovember1,2020,he rented a small, quiet studio for $700 a month and purchased aRoland electric piano for $7,750 (hint: capital assetClass 8)that was delivered there. He doesnot plan to use the space or piano for personal enjoyment, only forcomposing. This is considered as part of his business income.

The previous year, on January 2, 2019,Mr. Beethoven elected nottomakeanyfurtherCPPcontributionsonhis self-employedincome.

Mr.Beethovenisrequiredbyacourtordertopayspousalsupportof $400 per month to his former spouse, Brianna Beethoven. Mr.Beethovenmadespousalsupportpaymentsof$4,800during2020.

Mr. Beethoven is required by a court order to make child supportpayments of $350 per month for his two children, Lana and JimmyJoplin.Atotalof$4,200waspaidduringtheyear.

Mr. Beethoven contributed to the Federal Liberal Party for $610duringtheyear.

Mr. Beethoven made a $5,000 contribution to his TFSA during theyear. Thanks to the excellent investing advice of his gardener, thebalance in his TFSA account has grown to more than $175,000 bytheendoftheyear.

Required:WiththeobjectiveofminimizingMr.Beethoven'sTaxPayable, prepare Mr. Beethoven's 2020 income tax return using the Excel Worksheet provided.