AP 4-1  (Personal Tax Credits—Five Cases)
In each of the following independent cases, determine the maximum amount of 2023 personal 
tax credits, including transfers from a spouse or dependant, that can be applied against federal 
income tax payable by the individuals. In all cases, the individual's net income is equal to his or her 
taxable income. Ignore, where relevant, the possibility of pension income splitting. Unless stated 
otherwise, assume that each individual is less than 65 years of age.
A calculation of federal income tax payable is NOT required, only the applicable income tax credit 
base and the credit amount applied against federal income tax payable.
1.  Cammy Tarbell has net income of $96,500, all of which is employment income. Her employer 
has withheld maximum EI and CPP contributions. She is married to Bob Tarbell, who has net 
income of $8,650. They have four children ages 3, 5, 7, and 9. All of the children are in good 
health and none of them have any income in the current year.
2.  Scotty Severa has been divorced for a number of years. He has been awarded custody 
of his three children. The children are aged 7, 10, and 15 and they are all in good health. 
Scotty's net income is $71,400, all of which is spousal support payments. The two younger 
children have no income of their own. The 15 year old has income from part-time jobs of 
$8,640.
3.  Donna Preble has net income of $126,325, all of which is rental income. Her spouse, Donald, Her spouse, Donald, 
has net income of $6,340. Their daughter, Diane, is 26 years old and has recently suffered 
injuries as a result of a bad fall, causing her to take an extended unpaid leave of absence from 
her employment. Her parents offered to help her during this diffcult time, so she is currently 
living with them and has no income during the current year.
4.  Bibi Spillman is 68 years old. Her net income totals $65,420 and is made up of OAS payments 
of $8,400 and pension income of $57,720 from a former employer. Her spouse is 62 years old 
and has net income of $6,250.
5.  Clarice McBryde has net income of $132,400, all of which is employment income with the 
exception of a deduction for CPP of $631. Her employer has withheld the maximum EI and CPP 
contributions. She and her husband, Moishe, have two children aged 11 and 13. Moishe and 
the children have no income of their own during the current year.
The 13-year-old child was severely injured in a car accident two years ago and qualifes for 
the disability tax credit. No amount was paid for attendant care for this child during the 
current year.
Clarice spent $12,500 installing wheelchair ramps to improve access to various parts of the 
family residence. She also spent the following on dental fees and fees for various authorized 
medical practitioners:
Clarice $  4,420
Moishe 2,620
11-year-old child 1,875
13-year-old child 14,250
Total medical expenses paid $23,165Her spouse, Donald, 
has net income of $6,340. Their daughter, Diane, is 26 years old and has recently suffered 
injuries as a result of a bad fall, causing her to take an extended unpaid leave of absence from 
her employment. Her parents offered to help her during this diffcult time, so she is currently 
living with them and has no income during the current year.
4.  Bibi Spillman is 68 years old. Her net income totals $65,420 and is made up of OAS payments 
of $8,400 and pension income of $57,720 from a former employer. Her spouse is 62 years old 
and has net income of $6,250.
5.  Clarice McBryde has net income of $132,400, all of which is employment income with the 
exception of a deduction for CPP of $631. Her employer has withheld the maximum EI and CPP 
contributions. She and her husband, Moishe, have two children aged 11 and 13. Moishe and 
the children have no income of their own during the current year.
The 13-year-old child was severely injured in a car accident two years ago and qualifes for 
the disability tax credit. No amount was paid for attendant care for this child during the 
current year.
Clarice spent $12,500 installing wheelchair ramps to improve access to various parts of the 
family residence. She also spent the following on dental fees and fees for various authorized 
medical practitioners:
Clarice $  4,420
Moishe 2,620
11-year-old child 1,875
13-year-old child 14,250
Total medical expenses paid $23,165
Reimbursement from company medical plan
—Plan's annual maximum (  11,000)
Net medical expenses paid $12,165

 

 

 

P 4-2  (Individual Tax Payable—Five Cases)
Mr. Ethan Rampersaud is 45 years old. The following fve independent cases make varying 
assumptions for 2023 with respect to Mr. Rampersaud' marital status and number of depen-dants. In all cases, Mr. Rampersaud had net income of $70,000, all of which is employment 
income with the exception of a CPP deduction of $631 (ITA 60(e.1)). Mr. Rampersaud's employer 
withheld the required maximum EI premiums and CPP contributions.
Case A  Mr. Rampersaud is married and his wife, Mia, has net income of $8,800. Mia's 
73-year-old mother, Bernice, lives with them. Bernice has a mental infrmity that is not 
severe enough to qualify for the disability tax credit. However, it does make her dependent 
on Ethan and Mia. Because of a large investment portfolio, Bernice's net income for 2023 
is $19,000.
Case B  Mr. Rampersaud is married and his wife, Mia, has net income of $4,410. They 
have one child, Martha, who is 10 years of age. Martha had no income during the year. 
During the year, the family had medical expenses as follows:
William $1,200
Susan 1,600
Martha 350
Total $3,150
Case C  Mr. Rampersaud is married and his wife, Mia, has net income of $4,500. They have 
a son, Mohamed, who is 19 years old and lives at home. He attends university on a full-time 
basis during eight months of the year. Mr. Rampersaud pays $9,000 for Mohamed's tuition. 
Mohamed had net income of $2,200, all of which is employment income earned during tCase C  Mr. Rampersaud is married and his wife, Mia, has net income of $4,500. They have 
a son, Mohamed, who is 19 years old and lives at home. He attends university on a full-time 
basis during eight months of the year. Mr. Rampersaud pays $9,000 for Mohamed's tuition. 
Mohamed had net income of $2,200, all of which is employment income earned during the 
summer months. He will transfer any unused credits to his father to the maximum extent 
possible.
Case D  Mr. Rampersaud is not married and has no dependants. On receipt of a $300,000 
inheritance in December, he donates $50,000 to his local hospital, a registered charity. He 
chooses to claim $15,000 in 2023. He also makes contributions to a federal political party 
in the amount of $1,000.
Case E  Mr. Rampersaud is a single father. He has a daughter, Mary, who is 8 years old 
and lives with him. Two years ago, Mr. Rampersaud graduated from a Canadian university. 
He currently has a Canada student loan outstanding. Mr. Rampersaud pays back this loan 
in monthly instalments of $300. During the year, he paid $450 in interest on this loan.
Required:  In each case, calculate Mr. Rampersaud's 2023 minimum federal income tax pay-able. Indicate any carry forwards available to him and his dependants. Ignore any income tax 
amounts that Mr. Rempersaud might have had withheld or paid by instalments.