LARRY AND LINDA SMITH ARE MARRIED AND LIVE WITH ALL OF THEIR CHILDREN.

THEY HAVE ASKED YOU TO PREPARE THEIR INCOME TAX RETURNS 2022

ON CANTAX (NOT THEIR CHILDREN'S)

LARRY: SIN # (ANY).; BIRTH: DECEMBER 15, 1970. (Insert your name)

LINDA: SIN # (ANY): BIRTH: JANUARY 12, 1976. (Insert your name)

NOTE: (USE ANY ADDRESS AND ANY OTHER PERSONAL INFORMATION REQUIRED!! THANKS)

CHILDREN:

MARY-BIRTH: MAY 11, 2019; NET INCOME: $0; DISABLED: HEARING LOSS;

MIKE -BIRTH: OCTOBER 12, 2002; NET INCOME/Taxable Income: $15,000; FULL-TIME (8

MONTHS) COLLEGE STUDENT: TUITION: $10,000 PAID BY PARENTS.

Larry worked 500 Hours this year as a Volunteer Fire Fighter. (Volunteer Fire Fighter Credit)

The parents also paid $50,000 in Adoption Fees to officially adopt Mary, this year.

LARRY AND LINDA 'S INVESTMENT INCOME- (Line 12000 and 12100).

TD BANK INTEREST $1,000 (Larry)

CANADA SAVING BONDS INTEREST $500 (Linda)

SCOTIA BANK ELIGIBLE DIVIDEND RECEIVED IN CASH: $1,000 (Larry)

RENTAL INCOME: (LINDA) (Line 12600)

20% of Building is used for personal use)

COMMERCIAL BUILDING CLASS 1, UCC (JAN 1, 2022): $200,000 (net of 20% personal use)

FURNITURE CLASS 8: UCC (JAN 1, 2022): $10,000; PURCHASE: COST $20,000; DISPOSAL:

ORIGINAL COST: $5,000; PROCEEDS: $20,000. Hint: Capital Gain, L12700

GROSS RENT - $90,000

MAINTENANCE EXPENSE - $40,000 (non capital, and deductible)

MORTGAGE INTEREST - $2,000

PROPERTY TAX - $3,000

STOCKS AND OTHER CAPITAL GAINS: (LARRY) (Line 12700)

SOLD HIS LPP-Painting FOR $8,000 WHICH COST HIM $200 TO PURCHASE SOLD XYZ SHARES - COST $30,000; PROCEEDS $50,000

PRIOR YEARS' UNUSED ALLOWABLE CAPITAL LOSSES $10,000 (2005) (Hint: use Line 25300)
 

 

STOCKS AND OTHER CAPITAL GAINS: (LARRY) (Line 12700)

SOLD HIS LPP-Painting FOR $8,000 WHICH COST HIM $200 TO PURCHASE SOLD XYZ SHARES - COST $30,000; PROCEEDS $50,000

PRIOR YEARS' UNUSED ALLOWABLE CAPITAL LOSSES $10,000 (2005) (Hint: use Line 25300)

INVESTMENT INTEREST EXPENSE - $2,500; (Line 22100, Schedule 4)

PROFESSIONAL CONSULTING BUSINESS (LARRY) (Use Line 13700 Professional)

REVENUE $40,000;

OFFICE SUPPLY EXPENSES $5,000;

CPA PROFESSIONAL FEES- $500

Home Office Expenses: (100M2 of 1,000M2 of home; Utilities was $1,000; Insurance was $2,000;

Property tax was $3,000)

AUTO: TOTAL KM DRIVEN IN 2022-20,000, BUSINESS-20% total expenses: gas ($5,000); Insurance ($1,200);Maintenance($4,000)

Auto cost (Ucc-$20,000, claim maximum)

PRIOR YEARS' UNUSED BUSINESS LOSSES $20,000 (2018) (Hint: Use Line 25200)

CANTAX T1- ASSIGNMENT #1, CONTINUED PAGE #2

EMPLOYMENT INCOME-LARRY (XYZ Co.)

SALARY-$90,000

Deductions:

El - Maximum for this year. (Look up for 2022)

CPP - Maximum for this year. (Look up for 2022)

INCOME TAX - $30,000

RPP - $3,000

LARRY CONTRIBUTED $5,000 TO HIS WIFE'S SPOUSAL RRSP (2022).

LARRY'S Last Year's EARNED INCOME = $20,000. NO PENSION ADJUSMENT.
 

 

 

 

EMPLOYMENT INCOME - LINDA (Indiana Corp)

GROSS-$40,000

Deductions:

El - Please calculate (The rate was 1.58%)

CPP - Please calculate. (The rate was 5.7%)

RPP-$1,000

INCOME TAX - $12,000

LINDA CONTRIBUTED THE MAXIMUM ALLOWED TO HER OWN RRSP (2022).

LINDA'S Last Year's EARNED INCOME = $50,000; PENSION ADJJUSTMENT. (Last Year)

=$2,000.

CONTRIBUTIONS: (LARRY AND LINDA)

Charities: UNITED WAY - $1,500; Hospital for Sick Kids - $7,000

QUALIFIED FEDERAL POLITICAL PARTY DONATION- $4,000

QUALIFIED MEDICAL EXPENSES - $10,000 (LINDA)

CHILD CARE EXPENSE (2022) - $5,000 (NANNY) USE ANY NAME AND ADDRESS.

Please ensure that you are backing up your file on a USB Stick or in your Cloud Storage. (Hint: Prior to submitting, please re-do the Medical and Charity Credit)

REQUIRED:

Using Cantax T1-Current, Calculate the Couples "MINIMUM" INCOME TAX PAYABLE for Larry and Linda

Please submit in PDF (as reviewed in class) the following for submission: