Mr$.$ Trevor is married and has a $19$ year old son. Mr$.$ Trevor's spouse had $2023$ net income of $$3,400.$

The son lives at home and, during the summer of $2023,$ he earned employment income of $$3,300.$ At the end of the summer, he began full time studies at a university. His tuition fees, which totaled $$6,500$ for $2023,$ were paid for by his father. The son's only other income was $$2,200$ of eligible dividends on a $$40,000$ portfolio of public company shares that were given to him by his father on his $16$th birthday. The son has agreed to transfer the maximum tuition credit to Mr$.$ Trevor

Mr$.$ Trevor has asked you to assist him in preparing his $2023$ income tax return. To this end, he provides you with the following list of receipts and disbursements for $2023$:

Receipts

Director's Fees $ $1,372$

Royalty income on Patent Purchased in $201529,400$

TFSA Withdrawal in January $10,000$

Bond Interest income $960$

Disbursements

Spousal RRSP Contribution in July $ $4,200$

TFSA Contribution in Dec $($Less than Contribution Limit$)4,000$

Rent Paid to Employer for Living Accommodation $18,000$

Financial Support of his father$*17,100$

$*$You ascertain that his father is physically infirm, is wholly dependent on Mr$.$ Trevor for support, had income of $$4,200$ during the year, and lives in Arizona for health reasons.

Mr$.$ Trevor is employed by a large public corporation with gross revenues of $$110$ million. His basic salary for $2023$ is $$71,500.$ Other information related to his employment is as follows:

$$ As part of his compensation package, his employer provides living accommodations that has a FMV $$2,500$ per month.

$$ Mr$.$ Trevor is provided with an award of $$3,600$ in recognition of his outstanding performance.

$$ His employer sponsors a money purchase RPP$.$ For $2023,$ Mr$.$ Trevor and his employer each contributed $$3,100$ to this plan. These contributions are the same as those made in $2022.$

$$ His employer withheld the maximum CPP contributions and EI premiums for $2023.$

$$ On September $1,2023,$ Mr$.$ Trevor's employer granted him an option to purchase $500$ of its shares at a price of $$5$ per share. The market price of the shares at that time was $$4$ per share. On December $1,2023,$ the market price of the shares had increased to $$9$ per share. On that date, Mr$.$ Trevor exercises his option and purchases the $500$ shares. He still owns the shares on December $31,2023.$

$$ His employer provides him with an automobile to use for his employment duties. The automobile cost $$41,000$ in $2022.$ The UCC of the automobile at January $1,2023$ is $$18,700.$ The Company pays all of the operating expenses which totaled $$12,300$ for $2023.$ Mr$.$ Trevor drives the automobile $42,000$ kilometers during $2023,$ of which $38,000$ were for employment purposes and $4,000$ for personal use. The automobile was available to Mr$.$ Trevor throughout all of $2023.$

Mr$.$ Trevor provides you with the following information on his dispositions of property during the year:

POD ACB

Diamond Necklace $$1,100$ $ $750$

Oil Painting $3,8005,100$

Graphic Novel Collection $8002,500$

Antique weapons Collection $8,0006,200$

Assume Mr$.$ Trevor's $2022$ earned income for RRSP purposes was equal to his $2023$ earned income. At the end of $2022,$ Mr$.$ Trevor had no unused deduction room and no undeducted RRSP contributions.

Required: For Parts A to F$,$ compute the required amounts for Mr$.$ Trevor for $2023.$ Show all calculations, including all those necessary to determine the maximum RRSP deduction for the year.

A$.$ Employment income.

B$.$ Income from property.

C$.$ Net taxable capital gains.

D$.$ Net Income.

E$.$ Taxable Income.

F$.$ Federal Income Tax Payable.

G$.$ Indicate any available carry over amounts for Mr$.$ Trevor and his son and the applicable carry over provisions.

H$.$ Mr$.$ Trevor's son would like some advice on whether he should contribute to a TFSA and$/$or an RRSP$.$ What would you suggest he do and why?

Answer: Part A Mr$.$ Trevor's $2023$ employment income: