Determine Roland's net income for tax purposes and taxable income for 2019

19. In making 018 Earned Income is equal to her 2019 Earned amount of additional contributions that she would have to make ke the maximum RRSP deduction. Assignment Problem Ten - 8 (Comprehensive Case Covering Chapters 1 to 10) Family Information two healthy children: Roland Sorter has been married to Rachel since their graduation from university. They have of $2,300. Richard Their son, Richard is 14 years old. He has 2019 income from part time jobs Roxanne Their daughter, Roxanne is 11 years old. Her 2019 income, also from part time jobs, is $3,600. The family's medical expenses, all paid for by Rachel are as follows: Prescription Glasses For Roland Rhinoplasty For Rachel (See Rachel's Business Income) $ 625 Physiotherapy Fees For Richard And Roxanne 9,350 Dental Braces For Richard 1,475 Psychologist Consulting Fees For Roxanne 8,560 2,450 Total $22,460 During 2019, Roland worked 225 hours as a voluntary firefighter. He did not receive any compensation for his work. nojus oh nohibbs at Rachel's Business Income Rachel is a lawyer who has an unincorporated professional practice specializing in lucrative contracts for TV and movie actresses. Her practice has a December 31 year end. From childhood, Rachel has been embarrassed by the size and shape of her nose. Since her clients put a lot of emphasis on looking beautiful, Rachel felt that her nose stood in the way of getting more important clients and had rhinoplasty surgery in 2018. It was not required for medical reasons. Unfortunately, complications from Rachel's surgery in 2018 resulted in a significant decrease in her revenues for that year. She was also very disappointed with the results of the rhinoplasty surgery.In 2019, she was introduced to a doctor who said he could greatly improve the look of her nose. She was convinced and the operation was a success. During 2019, the revenues from her legal practice totalled $411,000, double what she antici. pated. Rachel credited her perfected nose for much of the increase in business. She operates her practice out of a building that she purchased for this purpose in 2015. The building was acquired for $675,000 of which $175,000 reflected the estimated fair market value of the land. When purchased, the building was new and it has been allocated to a sepa. rate Class 1 for CCA purposes. Rachel's practice uses all of the building. On January 1, 2019, the building has a UCC value of $433,521. During the year 2019, Rachel renovated her offices, replacing the old furniture and fixtures with new furniture and fixtures at a cost of $67,000. The older furniture and fixtures were sold for $13,000. These older assets had a capital cost of $29,500 and a January 1, 2019 UCC of $13,594. During 2019, Rachel acquired other assets as follows: . A client list from a retiring lawyer for $23,000. . A new laptop computer for $1,400. . Applications software for $3,600. As she offers mobile legal services as part of her practice, Rachel uses an automobile in her business. She retired her previous vehicle at the end of 2018 and, on January 1, 2019, she acquired a new BMW for $53,000. During 2019, it was driven 21,000 kilometers, 3,000 of which involved personal use. Operating costs for the vehicle during 2019 totaled $4,200. Other 2019 costs of operating her business, determined on an accrual basis, are as follows; Building Operating Costs $29,400 Salaries And Wagesfor dante In 53,200 Office Costs 21,800 Meals With Clients 8,600 Roland's Employment Income Roland works for a large Canadian public company. His 2019 salary is $66,500, none of which involves commissions. His employer withholds the following amounts during the year: Registered Pension Plan Contributions" $2,300 El Premiums 860 CPP Contributions 2,749 Union Dues 460 *Roland's employer makes a matching contribution of $2,300. Roland's work requires some amount of travel. He uses his own vehicle for this travel. This vehicle was acquired on January 1, 2019 at a cost of $29,500. During 2019, he drove the vehicle 28,000 kilometers, of which 22,600 were employment related. His total operating costs for the year were $5,600. In addition to automobile costs, Roland has other travel costs as follows: Hotels Food On Out Of Town Trips $2,800 930 In addition to his salary, Roland's employer provides him with the following allowances for travel: Hotels And Out Of Town Meals Use Of Personal Automobile ($700 Per Month] $3,800 8,400Assignment Problems Investment Information All of the family's investments are in Rachel's name and purchased with her own funds. During 2019, these investments produced the following amounts of Income: Capital Gains On The Sale Of Public Company Share's Eligible Dividends $12,750 Interest Income 11,500 Total 6.300 Roland has no 2019 investment income. $10,550 RRSP Information Roland and Rachel have both invested on a regular basis in RRSPs. Information related to these plans is as follows: Rachel's Plan At the beginning of 2019 there was $6,500 of unused deduction room in Rachel's plan. Due to her decreased Income in 2018, she did not deduct all of her RRSP contributions. As of January 1, 2019 there was $8,800 in undeducted contributions. During 2019, Rachel contributes an additional $14,500 to her plan; Rachel's 2018 Earned Income for RRSP purposes was $116,000. She did not have a pension adjustment. information. She would like to take the maximum deduction that is available on the basis of this Three years earlier, during 2016, Rachel removed $18,000 from her RRSP under the provisions of the Home Buyers' Plan. After selling the family's existing residence in early 2017, Rachel used these funds, along with the proceeds from the old home, to acquire a new residence. Due to a continued oversight on the part of her myopic accountant, she did not designate any of her RRSP contributions as repayments of the Home Buyers' Plan funds in either 2018 or 2019. Roland's Plan At the beginning of 2019, Roland had unused deduction room in his plan of $5,500. He had no undeducted contributions. During 2019, Roland contrib utes $4,500 to his plan. He plans to take the maximum deduction available for 2019. At the beginning of 2019, after lengthy negotiations with his union, Roland's employer agrees to increase the benefit formula in the Company's defined benefit plan. The annual benefit will be increased from 1.75 of pensionable earnings to 2.00 percent of pensionable earnings. This change will be applied retroactively to the years 2017 and 2018. Roland has been a member of the plan for over 10 years. His pensionable earn- ings during the retroactive years were as follows: Year Pensionable Earnings 2017 $37,000 2018 42,000 Roland's 2016 Earned Income for RRSP purposes was $48,000. His employer reported a pension adjustment for that year of $4,100. Roland and Rachel will allocate tax credits between them to minimize the family's tax liability. Where either spouse can claim the credit and it makes no difference in the combined tax payable, Rachel will claim the credit. Que Required: Ignore GST/HST/PST considerations in your solution. A. Determine Rachel's Net Income For Tax Purposes and Taxable Income for 2019. B. Determine Rachel's federal Tax Payable and her CPP liability for 2019. C. Determine Roland's Net Income For Tax Purposes and Taxable Income for 2019. D. Determine Roland's federal Tax Payable for 2019