PART I: Tax Refund $or$ Owing

Spencer James $is41$ years old. $He$ has been married $to$ Suzanne James for over $10$ years.

Suzanne $is40$ years $of$ age. The couple have three children. All members $of$ the family are $in$

good health. Information $on$ the children $isas$ follows:

Charles and Charlene are $8-$year$-$old twins. $In2023,$ each $of$ the twins received eligible

dividends $of$ $$1,000on$ public company shares that were gifted $to$ them $by$ their father $in$

July $2022(total$ $$2,000).At$ the time $of$ the gift, each block $of$ shares had $anFMVof$

$$9,500.$ Spencer had acquired the two blocks $of$ shares $at$ a cost $of$ $$8,000$ each. $In$

December $2023,$ each twin sold their shares for $$10,000.$

Charlton $is19$ years old and attended university $on$ a full$-$time basis for four months $of$

the year. Spencer and Suzanne paid his tuition fees $of$ $$6,300,$ along with textbook costs

$of$ $$650.He$ has agreed $to$ transfer the maximum amount $of$ his tuition credit $to$ his father.

Charlton lives with Spencer and Suzanne. His only income for the year $is$ from the sale

$of$ shares purchased from Spencer $as$ described $in$ the following paragraph.

$In$ June $2023,$ Spencer sold shares with $an$ ACB $of$ $$28,000$ and a $FMVof$ $$36,500to$ his son,

Charlton. $In$ order $to$ provide Charlton with money $to$ purchase $an$ automobile and $to$ create $a$

capital loss for himself, $he$ sold the shares $to$ Charlton for $$5,000.$ Charlton sold the shares $in$

September $2023$ for $$42,000.$

Because $of$ their work demands, Spencer and Suzanne had child care expenses for the twins $of$

$$250$ per week $($ $$125$ each$)$ for $48$ weeks. During the remaining four weeks, the twins were sent

$to$ summer camp $at$ a cost $of$ $$250$ per child per week.

$(Assume$ that Suzanne's earned income $is$ $$50,000$ and Spencer's earned income $is$ $$120,000$

for child care purposes.$)$

Suzanne's Income Information

Suzanne worked for a public company for a few years. When she joined the company, she

received options $to$ purchase $500$ shares $at$ $$45$ per share, the estimated fair market value $of$

the shares $at$ the time the options were granted was $$50.$ Suzanne exercised the options $in$

$2020$ when the fair market value was estimated $tobe$ $$60$ per share.

Suzanne decided $to$ start her own business $to$ have flexible work hours and a better balance

between her work and family life. Therefore, $in$ January $2023,$ she resigned from her position $in$

the public corporation and sold the shares acquired through the stock options for $$65$ per share.

She started a mail$-$order business $as$ a sole proprietor from rented space. $In2023,$ her business

income, calculated for income tax purposes, was $$50,000.$

$In2023,$ Suzanne spent six consecutive weeks $(full-$time$)$ attending a specialized business

accounting program $at$ a designated educational institution. She received a tuition income tax

receipt that stated she had paid $$2,000in$ tuition fees. Additional financial information about Suzanne for the year:

Owns two residential rental properties. Both properties are $in$ separate Class $1.At$ the

beginning $of$ the year Property A has a UCC $of375,000$ and Property $B$ has a UCC $of$

$400,000.In2023$ Suzanne added major capital improvements $to$ Property $B$ for a cost $of$

$$20,000$ and sold Property A during the year for $$420,000(the$ capital cost $of$ the

building was $$395,000).$

Property $B$ earned net rental income $(before$ consideration CCA$)of$ $$12,000$ and

property A had a net rental loss $of$ $$8,000.$

Purchased $a$ $$10,000$ GIC $(guaranteed$ investment certificate$)on$ June $1,2022.$ The

GIC pays interest $at$ maturity $on$ May $30,2025,at$ a rate $of4\mathrm{.}85\%$ compounded

annually.

Purchases and sales $of$ shares $of$ ACB $Ltd.$ are $as$ follows:

March $15,2023$: Purchase $350$ shares $at$ $$21\mathrm{.}50$ per share

September $10,2023$: Purchase $300$ shares $at$ $$23$ per share

December $29,2023$: Sold $400$ shares $at$ $$19$ per share

January $15,2024$: Purchase $300$ shares $at$ $$18\mathrm{.}5$ per share

Received $$6,500in$ dividends $(netof$ withholding tax $at15\%)$ from investments $ina$

foreign country.

Disposed $of$ several