Dr. Jala Anderson has hired your professional services to file her income tax return. Dr. Anderson is a retired. surgeon. Due to her failing eyesight, Jala was required to retire from her occupation at a younger age than normal. Fortunately, Jala has more than enough income to support herself as a result of years of receiving a very large salary as a surgeon and a family inheritance. Jala has invested most of her past employment earnings into a large portfolio which paid the following amounts during 2020 , the current year. (Click on the icon to View Part 1 of the additional information.) (Click on the icon to view Part 2 of the additional information.) Requirement 1. Compute Dr. Anderson's net property income for 2020. Fill in the table below to compute the net property income. (Round amounts to the nearest cent Enter deductions with parentheses or a minus sign.) Additional info (part 1) Dr. Jala Anderson has hired your professional services to file her income tax return. Dr. Anderson is a tetired surgeon. Due to her falling eyesight, Jala was required to retire from her occupation at a younger age than normal. Fortunately, Jalo has more than enough income to support herself as a result of years of receiving a very latge salary as a surgeon and a family inheritance. Jala has invested most of her past employment earnings into a large portfolio which paid the following amounts during 2020 , the current yeat. (click on the icon to view Part 1 of the additional information.) (Click on the icon to view Part 2. of the additional information.) Additional info (part 2) st cent, Enter dedictions with In 2019, the previous year, Jala received a iarge family inheritance, which she invested into a rental property. The property was purchased in 2019 , and Jala has claimed the maximum amount of capital cost allowance (CCA) on the property in 2019. In 2020, the opening UCC balance in CCA Class 1 for the rental building is $360,000 and Jala would like to claim the maximum CCA deduction on the rental income in 2020 . The rental income and expense information for 2020 is as follows: To assist with filling her tax return, Jala provides you with detailed records from her bank. The documents indicate that Jala has borrowed the following amounts from her bank. - $205,000 mortgage on the rental property with principal repayments totaling $14,000 and interest payments of $7,100 for 2020 - $370,000 mortgage on Dr. Anderson's personal home with principal repayments totalling $18,500 and interest payments of $8,200 for 2020 - \$175,000 loan used to purchase mutual funds with Premier Investments inc, Jala peid interest of $4,900 on this loan during 2020. - \$46,500 loan used to purchase Jala's personal use vehicle. Jala paid $2,370 of interest on this loan during 2020 . Required 1. Compute Dr. Anderson's net property income for 2020. 2. Jala has reviewed your calculation of net property income and she is confused. Jala does not understand why the dividend income included in your calculation is different than the amounts she received in the year. Describe for Jala the concept of integration and how this impacts the taxation of Canadian: source dividends as well as the tax consequences of foreign source dividends received by an individual in Canada. 3. Jala informs you that she plans on selling her rental property in the near future and using a portion of the proceeds from the sale to pay off some of her debt with the bank. Jala would like your advice on which loans she should pay back first in order to achieve the most favourable tax consequences. 4. Prior to selling the rental property, Jala plans on upgrading the wood siding on the house to vinyl siding. Explain to Jala the difference between capitalizing and expensing costs, and indicate which treatment the siding cost should receive. 5. Explain to Jala the tax consequences that could occur if she sells the rental property due to the fact that she has claimed the maximum CCA on the rental property since acquisition. Dr. Jala Anderson has hired your professional services to file her income tax return. Dr. Anderson is a retired. surgeon. Due to her failing eyesight, Jala was required to retire from her occupation at a younger age than normal. Fortunately, Jala has more than enough income to support herself as a result of years of receiving a very large salary as a surgeon and a family inheritance. Jala has invested most of her past employment earnings into a large portfolio which paid the following amounts during 2020 , the current year. (Click on the icon to View Part 1 of the additional information.) (Click on the icon to view Part 2 of the additional information.) Requirement 1. Compute Dr. Anderson's net property income for 2020. Fill in the table below to compute the net property income. (Round amounts to the nearest cent Enter deductions with parentheses or a minus sign.) Additional info (part 1) Dr. Jala Anderson has hired your professional services to file her income tax return. Dr. Anderson is a tetired surgeon. Due to her falling eyesight, Jala was required to retire from her occupation at a younger age than normal. Fortunately, Jalo has more than enough income to support herself as a result of years of receiving a very latge salary as a surgeon and a family inheritance. Jala has invested most of her past employment earnings into a large portfolio which paid the following amounts during 2020 , the current yeat. (click on the icon to view Part 1 of the additional information.) (Click on the icon to view Part 2. of the additional information.) Additional info (part 2) st cent, Enter dedictions with In 2019, the previous year, Jala received a iarge family inheritance, which she invested into a rental property. The property was purchased in 2019 , and Jala has claimed the maximum amount of capital cost allowance (CCA) on the property in 2019. In 2020, the opening UCC balance in CCA Class 1 for the rental building is $360,000 and Jala would like to claim the maximum CCA deduction on the rental income in 2020 . The rental income and expense information for 2020 is as follows: To assist with filling her tax return, Jala provides you with detailed records from her bank. The documents indicate that Jala has borrowed the following amounts from her bank. - $205,000 mortgage on the rental property with principal repayments totaling $14,000 and interest payments of $7,100 for 2020 - $370,000 mortgage on Dr. Anderson's personal home with principal repayments totalling $18,500 and interest payments of $8,200 for 2020 - \$175,000 loan used to purchase mutual funds with Premier Investments inc, Jala peid interest of $4,900 on this loan during 2020. - \$46,500 loan used to purchase Jala's personal use vehicle. Jala paid $2,370 of interest on this loan during 2020 . Required 1. Compute Dr. Anderson's net property income for 2020. 2. Jala has reviewed your calculation of net property income and she is confused. Jala does not understand why the dividend income included in your calculation is different than the amounts she received in the year. Describe for Jala the concept of integration and how this impacts the taxation of Canadian: source dividends as well as the tax consequences of foreign source dividends received by an individual in Canada. 3. Jala informs you that she plans on selling her rental property in the near future and using a portion of the proceeds from the sale to pay off some of her debt with the bank. Jala would like your advice on which loans she should pay back first in order to achieve the most favourable tax consequences. 4. Prior to selling the rental property, Jala plans on upgrading the wood siding on the house to vinyl siding. Explain to Jala the difference between capitalizing and expensing costs, and indicate which treatment the siding cost should receive. 5. Explain to Jala the tax consequences that could occur if she sells the rental property due to the fact that she has claimed the maximum CCA on the rental property since acquisition
