3. Larry and his twin sister, Lara both turned nineteen (19) on October 1, 2020 (both are resident of Quebec). On October 15, 2020, they just inherited money ($30,000 each) from their grandfathers estate and want to invest it wisely. Neither really understand how a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) work and have come to you for guidance on how much they can contribute to the respective accounts on October 22, 2020. (See Table C and D; include catch-up for past years)

Larry: is looking to put the money in a Tax-Free Savings Account (TFSA) and is wondering what the maximum TFSA contribution he can make to his newly opened TFSA account. Any amount remaining from his inheritance, he would like to contribute it to his Registered Retirement Savings Plan (RRSP). Know that Larry worked last summer in 2019 at the bank and made $18,000 but could not get a job in 2020 due to COVID. He has never made a TFSA nor RRSP contribution to date.

Lara: already contributed $1,000 of her birthday money that she received a few weeks ago to her newly opened Tax-Free Savings Account (TFSA,) and is wondering what the maximum TFSA contribution she can now make with the inheritance (if any at all). Any amount remaining from her inheritance, she would like to contribute it to her Registered Retirement Savings Plan (RRSP). Know that Lara has never worked but has an internship lined up for next summer (May 2021) where she will make $13,000. She has never made an RRSP contribution to date.

1. Larry can contribute $12,000 to his TFSA and can contribute $3,240 to his 2020 RRSP; Lara can contribute $12,000 to her TFSA and can contribute $0 to her 2020 RRSP.
2. Larry can contribute $12,000 to his TFSA and can contribute $0 to his 2020 RRSP; Lara can contribute $11,000 to her TFSA and can contribute $0 to her 2020 RRSP.
3. Larry can contribute $6,000 to his TFSA and can contribute $18,000 to his 2020 RRSP; Lara can contribute $0 to her TFSA and can contribute $13,000 to her 2020 RRSP.
4. Larry can contribute $12,000 to his TFSA and can contribute $3,240 to his 2020 RRSP; Lara can contribute $11,000 to her TFSA and can contribute $0 to her 2020 RRSP.
5. Larry can contribute $6,000 to his TFSA and can contribute $3,240 to his 2020 RRSP; Lara can contribute $5,000 to her TFSA and can contribute $2,340 to her 2020 RRSP.