Max just turned 18 years old on February 18, 2022, and received money from his parents, aunts, and uncles. In total he had $2,000 and wanted to invest it. He has always saved his money and started saving at the age of 15 when he started working at his father's company, but until now, has only put it in his savings account. Max went to the Canada Revenue Agency (CRA) site under My Account after he filed his 2020 personal income tax return to confirm his contribution room for both a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA). He however is in a dilemma to know which one to contribute to. He is going to his bank next week to open both accounts and will decide then. His total contribution will be the $2,000 from his birthday and his previous savings of $3,000 when working with his father during summers. He will invest the $5,000 and then withdraw it all on December 15, 2022, to buy a touring bike for his trip to Australia that he will be taking over the holidays. See Table C and D.

a) Based on the information above, which would be the recommended account for Max to contribute to with regards to either an RRSP or TFSA, and the reason?

b) Max's mother thought her son was quite clever in investing his money. She does not understand how an RRSP or TFSA work and asked Max to help determine her contribution room for both accounts. Do not forget to consider her carryforward amounts (if any). Max's mother: (currently 40 years old, birthday is May 3rd):

• graduated from university in April 2000 but decided to stay home to raise Max;
• she never had a full or part-time job and is not planning on doing so as she spends endless hours volunteering with many charities in her community; and
• to date has never contributed to her RRSP nor to her TFSA.

2022 RRSP Contribution room for Max's mother:

2022 TFSA Contribution room for Max's mother: