Juan Hoop is a 58 year old executive working as the V.P. of Marketing for the X Company. He is married to Lesley and together they have 4 children, Jhonny aged 15, Benjie aged 12, Shirley aged 5 and Annette aged 3.

Both Juan and his spouse work full time. They hired a nanny to take care of the children when they were at work. They paid the nanny $300/week for 44 weeks to look after the children. In July 2021 they paid $3,000 for Jhonny and Benjie to go to summer camp for 4 weeks. Lesley’s earned income in 2021 was $185,000.

You have for several years been preparing his income tax return for him. He has now contacted you for the preparation of his T1 Return for the year 2021.

Juan has provided you with the following information:-

Gross Salary……………………………………………………………………………………$125,000

Income taxes withheld………………………………………………………… 40,000

Canada Pension Plan contributions……………………………………….…3,166

Employment insurance contributions ……………………………………… 800

Additional Information:-

i. Taxable capital gains(allowable capital loss)

Nestle Foods Ltd. (public company)……………………………………………18,000

Shares of Fortis(public company)………………………………………………….1000

ii. Monthly pension of $1,500 from a previous employer…………………………….18,000

Dividends from Bell Canada(public company) cash amount…………………….. 1,000

Sale of 100 shares of AT&T. He incurred an allowable capital loss of……….. 4,500

Interest from a joint account with his spouse at the TD Bank,,,,,,,,,,,,,,,,,,,,,, 1,400

Interest from a GIC ………………………………………………………………………….. 600

Interest on loan to sister…………………………………………………………………………. 260

Dividends from U.S. Corporation(15% withholding tax)…………………………. 5,100

Dividends from McCain foods(CCPC)………………………………………………………. 1,500

Carrying charges on loan to purchase McCain shares……………………………….. 1,000

Iii Juan likes to paint scenes of Ontario in his spare time. In 2021, he exhibited two of his painting in the local art gallery . These were sold for $1,800.

iv. During 2021, Juan sold his three residences, in order to purchase a larger home in a more expensive suburb. The following facts relate to these two residences:-

Date Purchased………….Cost………....Compensation……………….Proceeds

City Home……………………..2012………………………..$190,000…………$42,000………………………$700,000

Cottage………………………..2017………………………… 31,000……………24,000………………………..400,000

Farm…………………………..2019……………………………15,000……………21,000…………………………150,000

iv. Juan also is the owner of two rental properties in Waterloo, Ontario. Details of the two rental properties in 2021 are as follows.:-

Property A……………………….Property B

Rental Revenue……………………………………..$36,000……………………………..$24,000

EXPENSES:-

Utilities………………………………………..7,000…………………………………..5,000

Property taxes……………………………..5,000……………………………………1,700

Repair & Maintenance………………… 8,000…………………………………..7,000

The Undepreciated capital cost at January 1,2021 on Property A was $415,000 and Property B was $330,000. On December 15^th.,2021, Juan sold Property B for $600,000. The original cost of the property B was $345,000. He paid real estate commission of $15,000.

v. In May 2021, he used the proceeds from the sale of Property B above to purchase a duplex which he rented . This property was purchased for $900,000. Interest on the $500,000 mortgage was $6,100 for the year 2021. For the 7 months in 2021 he rented the property. Details of the rental is as follows:

Gross Rental Income…………………………..$18,000

EXPENSES:-

Advertising for clients………………(500)

Property taxes…………………………(3,400)

Utilities……………………………………(2,000)

vi. In 2021, Juan contributed $3,000 to his spouse’s RRSP and $5,000 to his own RRSP. His earned income in 2002 was $215,000. The employer reported a pension adjustment of $7,000 for the year. He had unused deduction room from previous years of $10,000.