Family Information

Mrs. Joan Brockton is 42 years of age and lives with her husband Jack Brockton. They have two children who live with them. Their son Joshua is 15 years old and has 2020 Net Income For Tax Purposes of $5,600, largely from part-time jobs during the summer. Their daughter Anna is 12 and is sufficiently disabled that she qualifies for the disability tax credit. Anna has no 2020 Net Income For Tax Purposes.

Joan's husband Jack is 41 years old and has gone back to university on a full time basis for all of 2020. His tuition fees for this period are $11,500. Jack has 2020 Net Income For Tax Purposes of $8,400, largely from investments that he made while he was still in the work force.

The family's 2020 medical expenses are as follows:

Joan $ 1,800

Jack 2,500

Joshua 3,400

Anna (No Attendant Care Costs) 11,500

Total $19,200

Joan makes 2020 donations to registered Canadian charities of $2,300.

Employment Information

Joan is employed by a large public corporation at an annual salary of $122,000. In addition, during 2020, she earned commissions of $46,000. Her employer withholds the following amounts from her income:

RPP Contributions $2,700

EI 856

CPP 2,898

Professional Association Dues 1,500

Joan's employer makes a matching contribution to her RPP of $2,700.

Her employer requires her to maintain an office in her home and has provided her with a signed Form T2200. The office occupies 15 percent of the floor space in her home. The 2020 costs of operating this property are as follows:

Maintenance And Utilities $2,200

Property Taxes 4,800

Insurance 950

Mortgage Interest 9,800

Several years ago, Joan's employer granted her options to buy 2,000 shares of the company's stock at a price of $20 per share. This was the market value of the shares at the time the options were granted. In January, 2020, when the shares are trading at $32 per share, Joan exercises all of the options. In December, 2020, the 2,000 shares are sold for $35 per share.

Joans employer pays her an allowance of $1,500 per month to cover all of her employment related expenses, including her use of an automobile that she owns personally. This automobile was acquired in 2019 at a cost of $29,500. In her 2019 tax return, she claimed CCA based on the automobile being used 75 percent for employment related activity. During 2020, only 60 percent of the automobile usage was employment related. Joans employment related expenses during the year are as follows:

Automobile Operating Expenses $4,200

Hotels 5,500

Airline And Other Transportation 7,600

Business Meals And Entertainment 6,400

Other Information

1. During 2020, Joan received eligible dividends of $2,350.

2. At the beginning of 2020, Joan owned 1,000 units of the Torstar Income Trusts. The adjusted cost base of these units at that time was $12 per unit. During 2020, the trust had a distribution of $1.00 per unit, all of which was interest income. Joan had all of this distribution invested in additional units at $14 per unit. In December, 2020, all of her Torstar units were sold for $16 per unit.

3. At the beginning of 2020, Joan owned a tract of land with an adjusted cost base of $125,000. Joan had owned the land for a number of years, hoping at some point to construct a rental property on the site. However, in 2020 she receives an unsolicited offer for the property of $375,000. She accepts the offer and immediately receives a payment of $100,000. The remaining $275,000 will be paid in 11 annual instalments of $25,000, beginning in 2021. Joan would like to use a capital gains reserve to defer as much 2020 taxation as possible.

4. For many years, Joan has owned a cottage on a nearby lake. It had cost $75,000, including an estimated value for the land of $20,000. On January 1, 2020, because of her familys declining use of this property, Joan decides to convert the property to a rental property. At this time, the property is appraised for 250,000, including $50,000 for the land. During 2020, net rental income before the deduction of CCA equals $3,900. Joan does not intend to designate the cottage as her principal residence in any of her years of ownership.

5. Joan owns a painting with an adjusted cost base of $2,000. During 2020, she sells this painting for $22,000.

Required: Calculate Mrs. Brocktons minimum 2020 Net Income For Tax Purposes, her 2020 minimum Taxable Income, and her minimum 2020 federal Tax Payable. Ignore provincial income taxes, any instalments she may have paid during the year, any income tax withholdings that would be made by her employer, and GST/HST/PST considerations.