MUST BE DONE IN CANADIAN INCOME TAXATION

Mr. Wilson Kim is married and has a 19-year-old son. Mr. Kim's wife had 2019 Net Income for Tax Purposes of $3,400. The son lives at home and, during the summer of 2019, 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 2019, were paid for by his father. The son's only other source of 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 16th birthday. The son has agreed to transfer any unused tuition credit to Mr. Kim. Mr. Kim has asked you to assist him in preparing his 2019 tax return. To this end, he provides you with the following list of receipts and disbursements for the 2019 taxation year: $ 1,372 29,400 10,000 960 Receipts Director's Fees Royalties on Patent Purchased In 2011 TFSA Withdrawal in January Bond Interest Disbursements Spousal RRSP Contribution in July TFSA Contribution in December (Less Than Contribution Limit) Rent Paid to Employer for Living Accommodation Financial Support of His Father* $ 4,200 4,000 18,000 17,100 *You ascertain that his father is physically infirm, is wholly dependent on Mr. Kim for support, had income of $4,200 during the year, and lives in Arizona for health reasons. Mr. Kim is employed by a large publicly traded corporation. His basic salary for 2019 is $71,500. Other information related to his employment is as follows: As part of his compensation package, his employer provides living accommodations that have a fair market value of $2,500 per month. Mr. Kim is provided with a performance award of $3,600 in recognition of his outstanding performance. His employer sponsors a defined contribution RPP. For 2019, Mr. Kim and his employer each contributed $3,100 to this plan. These contributions are the same as those made in 2018. His employer withheld the maximum for CPP contributions and El premiums for 2019. On September 1, 2019, Mr. Kim'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, 2019, the market price of the shares had increased to $9 per share. On that date, Mr. Kim exercises his option and purchases the 500 shares. He is still holding the shares on December 31, 2019. His employer provides him with a vehicle to use in his employment duties. The vehicle cost $41,000 in 2018. In the company's tax records it has a January 1, 2019 UCC of $25,500. The Company pays all of the operating costs which totaled $12,300 for 2019. Mr. Kim drives the vehicle 42,000 kilometers during 2019, of which 38,000 related to his employer's business. The car was available to Mr. Kim throughout 2019. Mr. Kim provides you with the following information on his dispositions of property during the year: Diamond Necklace Oil Painting Graphic Novel Collection Assault Rifle Collection Proceeds $1,100 3,800 800 8,000 Cost $ 750 5,100 2,500 6,200 Assume Mr. Kim's 2018 Earned Income for RRSP purposes was equal to his 2019 Earned Income. At January 1, 2019, Mr. Kim had no unused deduction room and no undeducted contributions in his RRSP account. Required: For Parts A to F, compute the required amounts for Mr. Kim for 2019. Show all calculations, including all those necessary to determine the maximum RRSP deduction for the year. A. Net employment income. B. Income from property. C. Net taxable capital gains. D. Net Income for Tax Purposes. E. Taxable Income. F. Federal Tax Payable. G. Indicate any available carry over amounts for Mr. Kim and his son and the applicable carry over provisions. H. Mr. Kim'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? Mr. Wilson Kim is married and has a 19-year-old son. Mr. Kim's wife had 2019 Net Income for Tax Purposes of $3,400. The son lives at home and, during the summer of 2019, 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 2019, were paid for by his father. The son's only other source of 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 16th birthday. The son has agreed to transfer any unused tuition credit to Mr. Kim. Mr. Kim has asked you to assist him in preparing his 2019 tax return. To this end, he provides you with the following list of receipts and disbursements for the 2019 taxation year: $ 1,372 29,400 10,000 960 Receipts Director's Fees Royalties on Patent Purchased In 2011 TFSA Withdrawal in January Bond Interest Disbursements Spousal RRSP Contribution in July TFSA Contribution in December (Less Than Contribution Limit) Rent Paid to Employer for Living Accommodation Financial Support of His Father* $ 4,200 4,000 18,000 17,100 *You ascertain that his father is physically infirm, is wholly dependent on Mr. Kim for support, had income of $4,200 during the year, and lives in Arizona for health reasons. Mr. Kim is employed by a large publicly traded corporation. His basic salary for 2019 is $71,500. Other information related to his employment is as follows: As part of his compensation package, his employer provides living accommodations that have a fair market value of $2,500 per month. Mr. Kim is provided with a performance award of $3,600 in recognition of his outstanding performance. His employer sponsors a defined contribution RPP. For 2019, Mr. Kim and his employer each contributed $3,100 to this plan. These contributions are the same as those made in 2018. His employer withheld the maximum for CPP contributions and El premiums for 2019. On September 1, 2019, Mr. Kim'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, 2019, the market price of the shares had increased to $9 per share. On that date, Mr. Kim exercises his option and purchases the 500 shares. He is still holding the shares on December 31, 2019. His employer provides him with a vehicle to use in his employment duties. The vehicle cost $41,000 in 2018. In the company's tax records it has a January 1, 2019 UCC of $25,500. The Company pays all of the operating costs which totaled $12,300 for 2019. Mr. Kim drives the vehicle 42,000 kilometers during 2019, of which 38,000 related to his employer's business. The car was available to Mr. Kim throughout 2019. Mr. Kim provides you with the following information on his dispositions of property during the year: Diamond Necklace Oil Painting Graphic Novel Collection Assault Rifle Collection Proceeds $1,100 3,800 800 8,000 Cost $ 750 5,100 2,500 6,200 Assume Mr. Kim's 2018 Earned Income for RRSP purposes was equal to his 2019 Earned Income. At January 1, 2019, Mr. Kim had no unused deduction room and no undeducted contributions in his RRSP account. Required: For Parts A to F, compute the required amounts for Mr. Kim for 2019. Show all calculations, including all those necessary to determine the maximum RRSP deduction for the year. A. Net employment income. B. Income from property. C. Net taxable capital gains. D. Net Income for Tax Purposes. E. Taxable Income. F. Federal Tax Payable. G. Indicate any available carry over amounts for Mr. Kim and his son and the applicable carry over provisions. H. Mr. Kim'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