Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For each of the following unrelated situations, indicate the appropriate tax treatment. State if the amount should be added to TOTAL INCOME, deducted in arriving

For each of the following unrelated situations, indicate the appropriate tax treatment. State if the amount should be added to TOTAL INCOME, deducted in arriving at NET INCOME for tax purposes or deducted in arriving at TAXABLE INCOME and any additional tax implications if applicable. Indicate the amount of the inclusion or deduction in your answers.

  1. Mr. and Mrs. Smith have one nine-year-old son. Both parents work out of the home. Mr. Smith's earned income for 2018 was $45,000 and Mrs. Smith's earned income was $35,000. During 2018, Mrs. Smith was off work for a period of 3 weeks with a severe cold. Total child care expenses for 2018 were $2,600.

  1. During 2018, Mrs. Klutz injured herself at work and consequently had to take some time off to recuperate. She received $ 1,275 in Workers Compensation payments.

(c) I. M. Smart attended St. Lawrence College as a full-time student during 2018 and received a scholarship in the amount of $3,000 and two student bursaries, totalling $1,500.

(d) During 2018, Mr. Gerry Atric received Old Age Security benefits in the amount of $8,300.00. Included in this total were Guaranteed Income Supplement benefits of $3,500.00.

(e) On November 2, 2018, Sandy Beech moved from Vancouver to Toronto to obtain employment. The costs of transporting his household effects from Vancouver to Toronto were $4,000. His employment income earned in Toronto for the months of November and December was $2,500.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing In The Food Industry From Safety And Quality To Environmental And Other Audits

Authors: M Dillon, C Griffith

1st Edition

1855734508, 978-1855734500

More Books

Students also viewed these Accounting questions