Assignment Problem Four - 6 (Tax Payable With Multiple Credits)

Ms. Eleanor Victoria's husband died two years ago. After her husband died, she moved from her house in Prince George, B.C., to a rented house in Victoria, B.C.

Ms. Victoria's widowed mother, Marjorie Vancouver, lives with Ms. Victoria and takes care of the house, Ms. Victoria's younger daughter, Amy, and all of the household cooking. She has 2020 Net Income For Tax Purposes of $8,000. She does not have a mental or physical disability.

Diane Victoria, Eleanor's older daughter, is studying psychology at McGill University in Montreal. Her feld is addiction research with a special emphasis on gambling. She does volunteer work at a gambling addiction treatment centre in Montreal in the summers. As Eleanor has paid for her tuition and living costs, Diane has agreed that any credits available should be transferred to her mother.

Diane has decided not to fle a tax return this year as she is too busy with her studies and volunteer work. Her Net Income For Tax Purposes of $2,300 was earned driving for a client of the addiction treatment centre who had lost his licence after being charged with impaired driving.

Other information concerning Ms. Victoria for 2020 is as follows:

1. Eleanor was born on May 15, 1968.

2. The birth dates and Net Income For Tax Purposes for the year of her dependants are as follows:

Birth Date (Y/M/D)Net Income

Diane1996-05-14$2,300

Amy(Net Income = UCCB)2004-10-11720

Marjorie1935-05-218,000

3. Eleanor's T4 for 2020 showed the following:

Salary $60,202

Employee's EI Premiums 856

Employee's CPP Contributions 2,898

RPP Contributions 2,406

Pension Adjustment 7,829

Union Dues 749

Charitable Donations 175

4. Eleanor and her family had the following medical expenses for 2020, all of which Eleanor paid for:

PatientMedical ExpensesDescriptionAmountEleanorGrace HospitalAmbulance Charge$ 392

EleanorParamed HomeHealth Nursing Care1,350

MarjorieDr. Zhang (Optometrist)Contact Lenses110

MarjoriePharmacyPrescription75

DianeDr. GlassmanPhysiotherapist100

AmyWalk Right Foot ClinicOrthotics450

AmyDr. TamoDental Fees1,120

Total$3,597

5. In addition to the $175 in charitable contributions withheld by Eleanor's employer, Eleanor and Diane had the following charitable donations for 2020:

DonorCharitable Donation ReceiptsAmount

EleanorHeart And Stroke$ 375

EleanorTerry Fox Foundation50

DianeAddiction Research Council Of Canada100

Because of donations in previous years, neither Diane nor Eleanor qualify for the frst-time donor's super credit. 6. During 2020, Diane was in university full time for eight months and part time for an additional two months. Her tuition fees for the year were $7,000.

Required:Calculate Eleanor's minimum 2020 federal Tax Payable (ignore the possibility of withholding by her employer). List any assumptions you have made and any notes and tax plan-ning issues you feel should be discussed with Eleanor.