Question
Liam has the following sources of income for the current year and the preceding year: Preceding year Current year Salary $50,000 $52,000 Less: Registered Pension
Liam has the following sources of income for the current year and the preceding year:
Preceding year
Current year
Salary
$50,000
$52,000
Less: Registered Pension Plan (RPP) contributions
(2,500)
(2,700)
Business income/(loss)
5,000
(2,000)
Rental income/(loss)
(2,000)
1,000
Net income (Division B)
$50,500
$48,300
Which of the following statements is correct with respect to earned income?
a. Liam would calculate childcare expense deductions for the current year using earned income of $47,300.
b. Liam would calculate childcare expense deductions for the current year using earned income of $50,000.
c. Liam's RRSP contribution for the current year would be based on earned income of $51,000 (ignoring unused RRSP contribution room).
d. Liam's RRSP contribution for the current year would be based on earned income of $53,000 (ignoring unused RRSP contribution room).
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