John Finch has provided you with the following information related to his various investment holdings as of December 31^st. 2021:-

1. Interest earned on joint bank account with his spouse(spouse contributes

Equally).$6,000

Interest earned on his own investment account.$10,000

Government of Canada Treasury Bills purchased for $9,000 on January 1^st.2021$20,000

Cash dividends received from Mc.Cain Foods(a CCPC)$24,000

Cash dividends received from Bank of America(US Corp.)

(15% withholding tax)$17,000

Rental income from the operation of two separate rental properties:

Property #1..Property#2

Gross Rental revenue $60,000..$92,000

Utilities 10,000.16,000

Property taxes.4,800.. 7,000

Repair& Maintenance 3,0009,600

Mortgagei nterest50,000.40,000

U.C.C..$736,418$1,040,250

2. His employment income for 2021 which is shown on his 2021 T4 slips is $95,000

3. Mr. Finch is 50 years old and is divorced. He has custody of his four children, Randy 25, Theresa 20, Max 18 and Joan 14.

Randy is severely disabled. He is certified as impaired. Mr. Finch has a part-time attendant who helps Randy. The attendant has been paid $15,000 for the year.

Theresa is at the University of Ottawa. Mr. Finch paid her tuition fees of $10,000 for the year.

Max is attending the Conservatory of Music in Toronto. Mr. Finch paid $8,000 for his classes in 2021.

Joan is attending high school.

4. Mr. Finch made the following additional expenditures in 2021:-

A .-Medical expenses for himself and Randy$6,000

-Prescription glasses for Max.$3,000

-Dental services for Joan....$2,000

B. Charitable donations to registered charities...$3,000

Political contributions to the Liberal Party of Ontario$2,000

5. Mr. Finchs father who is 86 years old lives with him.

Required:-Compute Mr. Finchs 2021 Federal Income Taxes Payable(show all calculations)

Appendix

Non-Refundable 2020 Tax credits

Dollar Base Rate Threshold

Basic Personal ..13,808 ** 15 $151,978

(If income is above threshold the credit is reduced to $12,421)

Spouse or Equivalent . 13,808 15 $151,978

Spouse orEquivalent..2,421..15 $216,151

Canada Caregiver ....7,348 .15 $17,256

Age credit..7,713 ..15(adjusted by the of Division B income over $38,893)

Pension income2,000....15

(In this case a choice is made between the $2000 and the lesser of the pension income)

Canada employment amount.1,257 ..15

Adoption expense amount....16,729...15

Home accessibility tax credit.10,000(Up to) .15

First time home buyers tax credit.........................................................5,000.15

(Can split with spouse)

Volunteer firefighters tax credit...3,000..15

Search and Rescue volunteers tax credit.3,00015

Home Accessibility Tax credit.10,000.15

CPP($3166-maximum)........................Amount paid15

EI($889-maximum)Amount paid.15

Pension........................................2,000 . 15

Mental or physical impairment amount...8,662 15

(Can transfer to a dependant)

Tuition amount.Amount paid

(can be transferred to a dependent or spouse or claimed by student in a subsequent tax year)

Medical expensesActual Medical Expenses :-

LESS:-Lesser of:-

$2,421

3% of Division B Income

Charitable donations..20015 , then 29% on amounts over $200

Interest paid on student loans.15% of actual

Dividend Tax Credit....6/11 of grossed up dividends for public corporations with gross up of 38% and 9/13 for CCPC with gross up of 15%

(An election can be made to transfer this credit to a spouse)

Digital News subscription credit is 15% for up to $500 subscriptions

Foreign Tax Credit...Lesser of:-

i. non-business income tax paid to a foreign country

ii. Net non business foreign income

divided by total Division B income times

This number times tax for the year for Part 1 taxes

Political Contribution Credit

$400 or less..75% of contribution

More than $400 but not more than $750..............................$300+50% of contribution over $400

More than $750, but not more than $1275. . $475+one-third of contribution over $750

More than $1275..$650

Any individual can transfer to the spouse any unused credits of:-

i. Tuition

ii. Age

iii. Pension

iv. Mental or physical impairment

Tax o Old Age Security Benefits.:-

Every resident in Canada is entitled to receive Old Age Security Benefits from the Federal Govt., once that resident is 65 years old. This amount received is clawed back(repayment to the Federal Govt.) at the end of the year depending on the Division B income of that person.

The Clawback is calculated as:-

Lesser of:-

i. Old Age Security Benefits received . $xxx

ii. Division B Income less $79,845. If there is an excess 15% of this amount reduces the benefit.