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Can someone please answer 1-5 in a memo format (Issue, analysis, and recommendation) You, CPA, are a tax consultant at the accounting firm of Sharp
Can someone please answer 1-5 in a memo format (Issue, analysis, and recommendation)
You, CPA, are a tax consultant at the accounting firm of Sharp Legere LLP in Toronto. It is November 18, 2021, and you are meeting with Dave Legere, partner, and his long-time client Paul Jacobson. Paul and his wife, Barbara, are in the process of getting divorced. They have three children: Ty (age 26), Jeremy (age 15), and Ellis (age 7). In preparation for the meeting, Dave asked you to review the family's personal tax file (Appendix I). Paul explains: Barbara and I are on good terms, but I need some help understanding the tax implications of our divorce. I was forced to sell some personal assets in order to make the lump-sum payment agreed upon in the divorce agreement. We decided I would keep the family house and Barbara would move into our rental property after evicting the current tenants. Here is the list of assets I sold and highlights from the proposed divorce agreement (Appendix II). I'm also worried I won't have enough income for retirement. I won't be able to make any more contributions to my RRSP because of the support payments I will be making to Barbara. Here is some of my retirement information (Appendix III). Paul leaves the meeting, and Dave gives you some ns. "Paul has a lot happening this year, so there is a lot he will need to know. I have anticipated some of his questions. Please draft a report to Paul answering the following questions for him: 1. Will he, Barbara, or both be able to claim child care expenses, and are there any limitations involved? Please also let him know what credits, if any, are available to him, Barbara, or both with respect to their minor children. 2. How will each of the support payments identified in the divorce agreement be treated for tax purposes? Will Paul or Barbara be able to claim a deduction for the legal costs they incurred for the preparation of the agreement? 3. How much tax, if any, will Paul pay on the sale of assets outlined in Appendix II? 4. What will be the tax impact on each of Paul and Barbara when he transfers his half of the ownership of the rental property to Barbara and she moves in? 5. Paul would like to know how much money will be available for him when he retires. Will this be enough to last through his entire retirement? Assume a marginal tax rate of 20% during retirement and ignore inflation in your analysisStep by Step Solution
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