Ken and Mary are married and have two children, ages three and six years. In 2019, Ken earned $70,000 from employment, and Mary earned $105,000 as a self-employed consultant. The couple employ a full-time nanny, at a salary of $12,000 per year, to take care of their two children while they work. They also paid overnight camp fees of $1,200 for two weeks for the older child.

On January 4, 2019, the family moved from Edmonton, Alberta, to Toronto, Ontario, so that Ken could accept a new position. Mary continued her consulting business in Toronto. The following expenses were incurred as a result of the move:

Return airfare for trip to find living accommodation $ 550

Hotel and meals for three days during trip to find living accommodation (receipts kept)500

Airfare for four persons on move to Toronto 2,000

Hotel and meals in Toronto and while moving for 20 days while waiting for completion of construction of the new home

Hotel (receipts kept) 3,000

Meals (not all receipts kept) 2,700

Repairs in respect of disposition of old home 1,000

Legal fees and commissions in respect of disposition of old home 3,700

Actual loss on sale of old home 27,000

Cost of transporting household goods 4,900

Legal fees and land transfer tax on acquisition of new home 900

Interior decorating of new home 9,500

In 2019, Ken received a termination payment of $21,000 from his previous employer, with whom he had been employed from October 1993 to December 2018. He contributed $5,000 of this amount to his RRSP. Ken received a moving allowance of $8,000 from his new employer and $6,000 in spousal support from his former spouse. Mary did not make an RRSP contribution.

Required:

Calculate Ken's and Mary's net incomes for tax purposes.(28 Marks)

Show all calculations.

Briefly explain why you left any amount out of these calculations.(7 Marks)