It is late March 2020. You have just met with your client Ahmed about his taxes. Ahmed has several tax issues for the 2019 taxation year that he needs your help with. 1. Ahmed has two T4 slips from 2019, as he moved during the year: Ontario Nova Scotia employer employer Employment income $62,200 $65,000 CPP deducted 2,749 2,749 El deducted 860 860 RPP contributions 2,500 1,500 Pension adjustment 4,000 3,000 Income tax deducted 12,000 12,500 2. Ahmed and his daughter Zeinab moved from Ontario to Nova Scotia during 2019 for work, which he began right away. Their moving expenses include the following items: Movers packing and transporting furniture and belongings $6,000 Selling costs of Ontario home 4,000 Legal costs to acquire new home in Nova Scotia 1,250 Costs related to vacant former home while up for sale 5,500 Costs to repaint new home 4,000 Gas to drive family car to Nova Scotia 200 Two nights in hotel for the family 400 Meals during the trip to Nova Scotia 200 For tax purposes, Ahmed would like to use the detailed method for calculating gas and meals expenses related to moving. 3. Ahmed owned a rental property in Toronto for several years. The property cost $500,000, with $150,000 allocated to the land and $350,000 for the building. It was put up for sale at the end of 2018 and was sold in July 2019 for $650,000, with $175,000 allocated to the land. The UCC balance on December 31, 2018, was $322,000. In anticipation of the sale, the tenant had moved out on December 31, 2018, and the property had been vacant until it was sold. Ahmed used the proceeds of the sale to purchase another residential rental property in Halifax on August 1, 2019. He does not want to defer any gains or recapture. Ahmed gave you the following income and expenses for this property for the year, along with its cost: Rental income $ 30,000 Total expenses 36,000 Total cost of property 480,000 Portion of cost allocated to land 80,000 Ahmed also advises you that he sold a piece of vacant land at a signicant loss this year. He had planned to build a rental property on the land but learned after purchasing it that it was highly polluted. The cost of this land was $200,000, and it was sold for $30,000 in 2019. 4. Ahmed has a T5 slip from 2019 indicating that he earned an eligible dividend of $20,000 and interest income of $300. 5. For the 2019 taxation year, Ahmed made RRSP contributions of $3,000. This is his rst RRSP contribution, and his RRSP deduction limit for 2019 is $120,000. 6. Ahmed pays spousal support payments to his ex-wife of $500 per month pursuant to a legal agreement. He is behind in his payments and was only able to pay $3,500 in 2019. Required: a) Calculate the following for the 2019 taxation year. Provide explanations for omitted amounts. i) Ahmed's rental income and any taxable capital gains and allowable capital losses from the sale of the real estate properties that he sold during 2019 (4.5 marks) ii) Ahmed's deductible moving expenses (4.5 marks) b) Calculate net income for tax purposes for Ahmed for 2019. (6.5 marks) c) Determine Ahmed's estimated RRSP deduction limit for 2020. (4.5 marks) Note: Round all amounts to the nearest dollar and ignore GST and provincial taxes. Show the full detail of all steps in your calculations, even if the result is zero
