Peter Weber is an accountant. Peter is 47 years old and is married to Claire who is 45 years old and blind. She has Net Income For Tax Purposes in 2020 of $9,000, all of which is interest on investments she inherited from her mother. Peter and Claire have three children, a 15 year old daughter, Haley, a 19 year old son, Martin and another 22 year old son Sam. Both Haley and Martin live at home. Haley earned $800 during 2020 baby-sitting. Martin has a disability that is not severe enough for his doctor to sign off for the disability credit. Sam goes to College full-time in a different city. His net income for tax purposes is $15,000 and his total tuition costs for the year are $8,000. He is willing to transfer part of his tuition credit to his father, if it makes sense. Peter and Claire had to hire a babysitter for Martin from time to time because of his disability and given that Claire was blind. The cost of babysitting was $1,500 during the school year. During the summer months, Martin went to a summer camps for 5 weeks at a cost of $1,000 per week. Martin inherited $100,000 from his grandmother and invested the money. He then received $15,000 in interest income from them during 2020. Peter's brother, Cameron, lives in the basement of Peter's Toronto home. Cameron is 50 years old and his only income for 2020 was EI benefit payments totaling $3,000. Peter also supports his 85 year old father, Jay, who is physically infirm and lives in a retirement home. Jay had Net Income For Tax Purposes of $9,000 for 2020. His income consisted investment income and payments from a registered pension plan. Peter works for Codlin Company and was paid a salary of $140,000 in 2020. He also earned a bonus of $5,000 in 2020, with one-fifth of the bonus paid in 2020 and the balance payable in 2021. During 2020 he received a briefcase worth $800 as an award for being the "employee of the year" and a Christmas basket from the company worth $600. All of the Company's employees received a similar basket. Codlin transferred Peter from their Toronto office to their Vancouver office in 2020. On April 1, Peter moved his family out of the house they had rented in Toronto for the last 10 years and into a brand new house in Vancouver that cost $800,000. Although Jay was to stay at the retirement home in Toronto, Cameron moved with the family to Vancouver. The total eligible moving costs were $3,500. Peter was reimbursed by his employer for all of his moving costs except for $1,250. To help finance the new house, Codlin Company lent Peter $500,000 on April 1 at 1 percent interest. Peter would have paid as much as 5 percent interest on a similar loan from the bank. Assume that the prescribed interest rates for 2020 was 2 percent for the entire year. On January 1, Peter was offered a stock option entitling him to acquire 500 shares at a price of $38 per share. At the time the option was granted, the shares were trading at $39 per share. Peter exercised his option on May 1 and acquired all 500 at a time when the shares were trading at $44 per share. He sold all the shares on December 31st at a price of $50 per share. Codlin provides Peter with a company car. While he was at the Toronto office, he had a Toyota Highlander that the company leased for $875 per month ($50 of which was for insurance). The company paid $1,600 for the Highlander's other operating costs from January 1 to March 31. During that period, Peter drove the car 9,000 kilometers of which 6,000 kilometers were employment related. In Vancouver, Peter was not provided a company car. During 2020, the following amounts were deducted from Peter's pay: Federal Income Tax $8,500 CPP 2,898 EI 856 Group Life Insurance Premiums 600 Registered Pension Plan 1,200 United Way Donations 1,500 The company matched the life insurance and RPP amounts. During 2020, Peter paid the following amounts of eligible medical expenses: Himself $ 650 Claire 1,940 Haley 860 Martin1,250 Cameron 480 Jay 990 Peter paid $900 for his 2020 professional association dues. Membership was required by his employer but they did not pay for them. Peter earned interest on his bank account during 2020 for $1,000. Claire made a $500 donation to their church during 2020. Peter made contributions to the following during the year: 1) RRSP of $15,000 (he had lots of unused room).

2) TFSA of $10,000. 3) RESP (Registered Education Savings Plan) for $5,000 for Haley. Required: Calculate Mr. Webers: a) net employment income, b) net income, c) taxable income, d) federal taxes payable before credits, e) net federal taxes payable after credits.

1. Is the cash or accrual basis used to report bonuses for tax purposes? 2. How much in 'gifts or awards' are taxable? State $. 3. What is Peter's operating benefit ($) for the use of the company car? 4. 5. What is the dollar amount included in income related to the housing loan? How much ($) is the taxable capital gain or loss related to share sales during 2020? Name the individual(s) who Peter can use for the caregiver credit. 6. 7. 8. What are the qualifying child care expenses for purposes of computing the child care deduction for the family? State $. Who would claim the deduction? What is Martin's taxable income? State $. Does Peter get a deduction for enhanced CPP? Yes or No? If yes, how much ($)? Is Peter's contribution to his TFSA deductible? Yes or No? How much is Peter's deduction for his stock option plan? State $. 9. 10. 11. 12. 13. What is Peter's taxable income? Based on your answer in 12 above, how much is his total federal taxes payable before available credits? Show the subtotals in the box beside to ensure you earn part marks. Is Peter eligible for the first time home buyer credit? Yes or No How much of his moving expenses from Toronto to Vancouver are deductible? State $. How much is Peter's spousal credit (state $ before the 15%)? 14. 15. 16. 17. Are Peter's stock options 'in the money' or 'out of the money' at the grant date? 18. 19. 20. 21. Is Peter entitled to the reduced stand-by charge and alternative operating benefit when calculating his automobile benefit? Yes or No? What is the medical expense credit available ($) to Peter, Claire and their minor dependants (before the 15% credit)? What is the medical expense credit available ($) for Martin (before the 15% credit)? What is the medical expense credit available for Jay (before the 15% credit)? Assuming Sam only has his basic personal credit, how much ($) of his education credits will he be able to transfer to his father? Assuming Sam does make the transfer to his father, how much ($) of Sam's education credit will be able to carry forward to a future year? Can donations be carried forward? Yes or No? 22. 23. 24. 25. What is the dollar amount of the donation credit available for Peter? 26. 27. 28. How much of the employer matched RPP contribution is taxable to Peter? State $. How much of the employer matched RPP contribution is taxable to Peter? State $. How many credits do individuals automatically get if they are employed at some time during 2020 ? State the number of credits! Is there a limit to the number of years unused RRSP room can be carried forward? Yes or No. If yes, how many years? What is the dollar amount of Peter's stand-by charge benefit related to the use of his employer's vehicle? Is Peter getting a refund? Yes or No? 29. 30. 31. 1. Is the cash or accrual basis used to report bonuses for tax purposes? 2. How much in 'gifts or awards' are taxable? State $. 3. What is Peter's operating benefit ($) for the use of the company car? 4. 5. What is the dollar amount included in income related to the housing loan? How much ($) is the taxable capital gain or loss related to share sales during 2020? Name the individual(s) who Peter can use for the caregiver credit. 6. 7. 8. What are the qualifying child care expenses for purposes of computing the child care deduction for the family? State $. Who would claim the deduction? What is Martin's taxable income? State $. Does Peter get a deduction for enhanced CPP? Yes or No? If yes, how much ($)? Is Peter's contribution to his TFSA deductible? Yes or No? How much is Peter's deduction for his stock option plan? State $. 9. 10. 11. 12. 13. What is Peter's taxable income? Based on your answer in 12 above, how much is his total federal taxes payable before available credits? Show the subtotals in the box beside to ensure you earn part marks. Is Peter eligible for the first time home buyer credit? Yes or No How much of his moving expenses from Toronto to Vancouver are deductible? State $. How much is Peter's spousal credit (state $ before the 15%)? 14. 15. 16. 17. Are Peter's stock options 'in the money' or 'out of the money' at the grant date? 18. 19. 20. 21. Is Peter entitled to the reduced stand-by charge and alternative operating benefit when calculating his automobile benefit? Yes or No? What is the medical expense credit available ($) to Peter, Claire and their minor dependants (before the 15% credit)? What is the medical expense credit available ($) for Martin (before the 15% credit)? What is the medical expense credit available for Jay (before the 15% credit)? Assuming Sam only has his basic personal credit, how much ($) of his education credits will he be able to transfer to his father? Assuming Sam does make the transfer to his father, how much ($) of Sam's education credit will be able to carry forward to a future year? Can donations be carried forward? Yes or No? 22. 23. 24. 25. What is the dollar amount of the donation credit available for Peter? 26. 27. 28. How much of the employer matched RPP contribution is taxable to Peter? State $. How much of the employer matched RPP contribution is taxable to Peter? State $. How many credits do individuals automatically get if they are employed at some time during 2020 ? State the number of credits! Is there a limit to the number of years unused RRSP room can be carried forward? Yes or No. If yes, how many years? What is the dollar amount of Peter's stand-by charge benefit related to the use of his employer's vehicle? Is Peter getting a refund? Yes or No? 29. 30. 31