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Mr. I.M. Leaving formally separated from his wife early in 2016 . Custody of his four children , aged 18 , 13 , 12 , and I1 at the end of 2016 , was given to him as part of an agreement worked out with his wife in family court . To make a fresh start , effective March 31 , 2016 he resigned his position in Toronto , where he had been employed by the same employer since November 1983 and took a position in Kanata near Ottawa . In previous years , he had always prepared his own tax return , but because of the extraordinary events of 2016 , he was having some difficulty with the calculation of his income and taxes payable . He has come to you for help with these calculations , having already correctly calculated his income under Subdivision a , b , and [ of Division B as follows :` Subdivision a Salary ( from both employers in 2015 ) 575, 000 Taxable group term life insurance* premium paid by both employers 055 $75, 550 Less : RPP - ( both employers ) (5.100) $70. 450 Subdivision b Business income : Share of partnership income ( drawings of $4, 000 ) $ 8. 500 Property income :" Net rental loss from apartment building* 5 ( 4, 500 ) Grossed - up dividends from taxable* Canadian public corporations* 1 , 250 Canada Savings Bond interest* 600 ( 2, 650 ) Less : interest on loan to buy shares 250 12.90.0) $ 5, 500 Subdivision [ Taxable capital gains net of allowable capital losses Sale of shares $ 6, 000 Sale of cottage owned jointly with wife for past 5 years ( after principal residence exemption ) 5, 000 Sale of painting 500 11.500 Total 587. 550 Additional Information " ( 1 ) He had the following additional receipts during 2016 : A lump - sum payment out of the RPP of his former employer who had made vested contributions for the last 10 years ( including 2015 ) transferred directly to his RRSP 520, 000 A retiring allowance for long service from his previous employer 50,000 580, 000 ( 2 ) He made the following selected payments in respect of 2016 : RRSP contribution for 2016 ( Assume earned income in 2015 was the same as for 2016 and his pension adjustment for 2015 was $5 , 000 ) $70, 000 Legal fees :` - representation in family court 5 4, 500 -appealing a tax assessment , which he lost 1 , 250 5 , 750 Charitable donations ( consistent with prior years ) $ 1, 250 Maintenance payments for wife by virtue of agreement made pursuant to a court order .* Total of monthly payments for her maintenance 5 8, 000 Total of monthly payments directly to owner of her apartment _5,000 13,000 590, 000 ( 3 ) Mr. Leaving had net capital losses of $11 , 456 in 1999, which he has not used . ( 4 ) Mr. Leaving has never had a capital gain or loss before , nor has he ever claimed any of his capital gains exemption .* ( 5 ) Mr. Leaving had the following amounts withheld from his employment wages :" Canada pension plan premiums 52,544 Employment insurance premiums $ 955 ( 6 ) Mr. Leaving's oldest child , Scott , attends Queen's University and paid $4 , 000 in tuition* fees for eight months of full-time attendance during 2016 . Scott earned gross employment income of $2 , 500 during the summer . No deductions were taken from his pay . ( 7 ) Mr. Leaving's other children do not have any income . Required :" Complete the following calculations . Show all calculations whether or not they are necessary to the final answer . ( 1 ) Calculate the Subdivision e deductions for Mr. Leaving* ( 2 ) Calculate his taxable income and show all deductions to arrive at his taxable income . ( 3 ) Calculate his federal taxes payable*
