Required: 1. Calculate Gary and Heather's Net income for tax purposes. Show supporting computations whether or not relevant to your final answer. Ignore any GST/HST tax implications. Do this calculation in excel. 2. Calculate the federal tax owing, do not include provincial tax. For the purposes for this part please assume the following Net Income For Tax Purposes: Gary's NIFTP $156,000 Heather's NIFTP 196,000 Please note: the above NIFTP are NOT an indication of the correct NIFTP in Part 1. The purpose of providing this starting point is to ensure that marks are not lost in part 2 because of errors made on part 1 when calculating NIFTP. Do NOT try to manipulate your answer in Part 1 to get the NIFTP listed above as it will not be possible and is not relevant. Based on the Net Income for Tax Purposes (NIFTP) provided above, calculate Gary and Heather's taxable income and the federal tax owing for 2021. Assume Gary and Heather want to minimize tax where possible and all possible credits will be taken. 3. Based on your answers in point 1 and 2, prepare the T1 general form (8 pages) 4. Prepare a short memo outlining any suggestions you may have to help Gary and Heather minimize their overall tax in the future. This memo should be no longer than 1.5 pages, using times new roman font size 11. Your memo should be double lined. Note: Your response should be done in excel. Please include your name and your partner's name (if applicable) in the first tab of excel. Your calculations should be done in excel in a way to show the calculation. I should not be required to click on any cell to see how the calculations were performed. The only items that should be in Word is the memo outlining any tax planning suggestions you have for Gary and Heather Anderson. You can choose to work alone, or in pairs for this assignment. Uploading your response: - Do not email your response to me. You must upload your response to D2L on or before the deadline, so please allow enough time for uploading to deal with any technical difficulties. - Your response should be in excel. Please do not upload a pdf file as I cannot put any feedback in your pdf file. - The first tab in excel should contain the name of both partners - Please name your excel file as follows: Lastname partner 1_lastname partner 2 taxproiect ACCT2303. For example if my partner is John Smith, our files would be named: It is March 29, 2022 and Gary Anderson has come to you for some help in computing his income from his investments. He is trying to plan for the payment of his 2021 taxes and wants an idea as to how much that tax bill will be. He is also open to any tax planning suggestions you may have. Gary works for Fly Jet Aviation (Fly), a Canadian Controlled Private Corporation (CCPC). Gary, age 50, is married to Heather, who is 35 . Gary has a daughter, Tessa, who is 20 from his first marriage. Gary and Heather have two sons, Ben, age 10 and Jake, age 6. Gary has provided you with the following details regarding his activities for 2021: *Note that Gary has regularly made charitable contributions on his payroll deductions each year. Gary has been provided with the following benefits from his employer: The cost of travel, partially for work, are as follows (he now has a 4X4 truck) He drives mostly for work. During this year, he drove a total of 39,500kms:25,300km to client locations, 5,000kms between home and work and 9,200 km for personal use. He purchased his 44 from Devine Toyota, on January 10, 2021, for $54,000 plus $2,700 in GST. Additional costs of travel while away from the area of his home are airfare ($4,000), accommodation ($5,820), and meals ($3,380). Gary gave all of his customers a Christmas gift, for which he paid for which cost him \$1,600. Under Gary's contract of employment, he is required to pay all of his own employment-related expenses. He regularly travels out of the municipality on employment-related matters. ACCT 2303 - Personal tax case #3 Fall 2022 Gary sold 1,400 shares he held in Fly, for proceeds of $37,100. He acquired 3,200 shares in 2014 as a result of exercising stock options. At the time he exercised his options, the shares were valued at $28.5 per share. He was granted the options in 2013 to purchase 3,200 shares for $19 per share. At the time he was granted the options, the shares were valued at $22. He has owned LoveStruck shares for a number of years. LoveStruck is a public Canadian company. The shares paid total dividends of \$1.12 per share in 2021. On October 1, 2021, after the dividend payments for the year, Gary sold 800 shares for $57 per share and incurred brokerage fees are $1,500. Based on his history of transactions, at the time of the sale, he had 2,750 shares at an adjusted cost base of $37.50 per share. All values are presented in Canadian dollars. At the beginning of 2021, Gary had two rental properties. These properties are expected to have the following operating cash flows associated with them: Property #1 was purchased in 2011 at a cost of $140,000 for both the land and building. The cost of the land was $42,000 of this total purchase price. Property #2 was purchased in 2013 at total cost of $165,000; the fair market value of the of the land at the time was $33,000. The UCC balance in Class 1 for property #1 was $66,511 and Class 1 for property #2 was $97,207 at January 1, 2021. Both properties are considered residential properties. During 2021, the local community enacted strict new bylaws on the safety requirements of rental properties. To upgrade the two buildings to the new code would require $25,000 for property #1 and $72,000 for property #2. As a result, Gary decided to improve #1 and paid $25,000 in July 2021 . He decided to sell property #2 for $308,000, effective May 5,2021 . The fair market value of the land was appraised to be $80,000 and the building $228,000. Gary used the proceeds from his sale of rental property #2, net of the $25,000 needed for improvements in property #1, as a down payment towards the purchase a new rental property (residential sixplex). The cost of the new property was $950,000, of which $150,000 related to the cost of the land. This property sale closed on August 1, 2021. Interest on the $667,000 mortgage is $11,673 for the last five months of the year. He was able to rent the building's units to a business professional beginning in September with cash flows as follows: Gr Ex Gary's 2020 earned income for RRSP purposes was correctly calculated to be $78,500. His T-4 from his employer showed a pension adjustment of \$11,784 for 2020 . Gary contributed the following to his RRSP relating to 2021: Prior to 2021, Gary has always maximized his RRSP contributions. Heather has provided you with the following details regarding her activities for 2021. Heather owns a chocolate shop located in Brentwood Mall. She runs it as a sole-proprietorship without her husband's involvement. Allen and Bennet help out every Saturday at the shop. Neither receives a salary for their work. Heather pays for their sporting events and clothing so she does not feel she should pay them a wage. The income statement for 2021 and other information for Heather's chocolate shop are below: Additional information related to Heather's chocolate shop: The opening UCC balances at January 1, 2021 were as follows: During 2021 , Heather purchased the following depreciable assets for her business: In April 2021, Heather sold her owned business premises (consisting of land and a Class 1 building) and moved to a spot in Brentwood Mall, which is currently being leased. She received proceeds of $120,000 for the land (original cost of $75,000 ). The details of the sale of the former class 1 building, as well as the other depreciable assets sold during 2021 , are set out below: ACCT 2303 - Personal tax case #3 Fall 2022 During 2021, Heather purchased the client list from a competitor who was going out of business. She paid $37,000 for this list. The customer list had an indefinite life. Heather has the following loss carry-overs from prior years: - Non-capital loss from 2020 of $17,000 - Capital loss of $25,000, from the sale of shares that occurred in 2009 Heather is a partner in a partnership and owns 10% of the total units. During 2021 , the partnership earned total income of $45,000. Heather is entitled to 10% of the income. Of the $45,000,25% was from taxable capital gains, 50% was business income and the remaining balance was interest income. Heather has $42,000 in RRSP contribution room (not including the 2021 contribution room). Heather has not made any contributions to an RRSP this year. During 2021, Heather and Gary made the following selected expenditures: Care for the children: dditional information: 1. Medical expenses paid from January 1 to December 31, 2021 for the family are listed below. The family had nn mediral exnencec in onjn Gary's daughter Tessa has very poor eyes. It costs $1,500 to buy her special contact lenses. Even with the contact lenses, she can barely function and cannot obtain regular employment. As a result, Tessa's only source of income is scholarship from her school for $3,500. In spite of these hardships, she is attending the local university and with the aid of special equipment purchased in January 2021 for $10,000, is doing quite well. Tessa's tuition for the eight months that she will be in full-time attendance is $4,200. Tessa continues to live at home while she attends university. 2. Heather and Gary both believe in giving back and as such, made contributions to registered charities of $750 and 1,300 respectively in 2021 . They have made contributions to registered charities for the past 10 years. Required: 1. Calculate Gary and Heather's Net income for tax purposes. Show supporting computations whether or not relevant to your final answer. Ignore any GST/HST tax implications. Do this calculation in excel. 2. Calculate the federal tax owing, do not include provincial tax. For the purposes for this part please assume the following Net Income For Tax Purposes: Gary's NIFTP $156,000 Heather's NIFTP 196,000 Please note: the above NIFTP are NOT an indication of the correct NIFTP in Part 1. The purpose of providing this starting point is to ensure that marks are not lost in part 2 because of errors made on part 1 when calculating NIFTP. Do NOT try to manipulate your answer in Part 1 to get the NIFTP listed above as it will not be possible and is not relevant. Based on the Net Income for Tax Purposes (NIFTP) provided above, calculate Gary and Heather's taxable income and the federal tax owing for 2021. Assume Gary and Heather want to minimize tax where possible and all possible credits will be taken. 3. Based on your answers in point 1 and 2, prepare the T1 general form (8 pages) 4. Prepare a short memo outlining any suggestions you may have to help Gary and Heather minimize their overall tax in the future. This memo should be no longer than 1.5 pages, using times new roman font size 11. Your memo should be double lined. Note: Your response should be done in excel. Please include your name and your partner's name (if applicable) in the first tab of excel. Your calculations should be done in excel in a way to show the calculation. I should not be required to click on any cell to see how the calculations were performed. The only items that should be in Word is the memo outlining any tax planning suggestions you have for Gary and Heather Anderson. You can choose to work alone, or in pairs for this assignment. Uploading your response: - Do not email your response to me. You must upload your response to D2L on or before the deadline, so please allow enough time for uploading to deal with any technical difficulties. - Your response should be in excel. Please do not upload a pdf file as I cannot put any feedback in your pdf file. - The first tab in excel should contain the name of both partners - Please name your excel file as follows: Lastname partner 1_lastname partner 2 taxproiect ACCT2303. For example if my partner is John Smith, our files would be named: It is March 29, 2022 and Gary Anderson has come to you for some help in computing his income from his investments. He is trying to plan for the payment of his 2021 taxes and wants an idea as to how much that tax bill will be. He is also open to any tax planning suggestions you may have. Gary works for Fly Jet Aviation (Fly), a Canadian Controlled Private Corporation (CCPC). Gary, age 50, is married to Heather, who is 35 . Gary has a daughter, Tessa, who is 20 from his first marriage. Gary and Heather have two sons, Ben, age 10 and Jake, age 6. Gary has provided you with the following details regarding his activities for 2021: *Note that Gary has regularly made charitable contributions on his payroll deductions each year. Gary has been provided with the following benefits from his employer: The cost of travel, partially for work, are as follows (he now has a 4X4 truck) He drives mostly for work. During this year, he drove a total of 39,500kms:25,300km to client locations, 5,000kms between home and work and 9,200 km for personal use. He purchased his 44 from Devine Toyota, on January 10, 2021, for $54,000 plus $2,700 in GST. Additional costs of travel while away from the area of his home are airfare ($4,000), accommodation ($5,820), and meals ($3,380). Gary gave all of his customers a Christmas gift, for which he paid for which cost him \$1,600. Under Gary's contract of employment, he is required to pay all of his own employment-related expenses. He regularly travels out of the municipality on employment-related matters. ACCT 2303 - Personal tax case #3 Fall 2022 Gary sold 1,400 shares he held in Fly, for proceeds of $37,100. He acquired 3,200 shares in 2014 as a result of exercising stock options. At the time he exercised his options, the shares were valued at $28.5 per share. He was granted the options in 2013 to purchase 3,200 shares for $19 per share. At the time he was granted the options, the shares were valued at $22. He has owned LoveStruck shares for a number of years. LoveStruck is a public Canadian company. The shares paid total dividends of \$1.12 per share in 2021. On October 1, 2021, after the dividend payments for the year, Gary sold 800 shares for $57 per share and incurred brokerage fees are $1,500. Based on his history of transactions, at the time of the sale, he had 2,750 shares at an adjusted cost base of $37.50 per share. All values are presented in Canadian dollars. At the beginning of 2021, Gary had two rental properties. These properties are expected to have the following operating cash flows associated with them: Property #1 was purchased in 2011 at a cost of $140,000 for both the land and building. The cost of the land was $42,000 of this total purchase price. Property #2 was purchased in 2013 at total cost of $165,000; the fair market value of the of the land at the time was $33,000. The UCC balance in Class 1 for property #1 was $66,511 and Class 1 for property #2 was $97,207 at January 1, 2021. Both properties are considered residential properties. During 2021, the local community enacted strict new bylaws on the safety requirements of rental properties. To upgrade the two buildings to the new code would require $25,000 for property #1 and $72,000 for property #2. As a result, Gary decided to improve #1 and paid $25,000 in July 2021 . He decided to sell property #2 for $308,000, effective May 5,2021 . The fair market value of the land was appraised to be $80,000 and the building $228,000. Gary used the proceeds from his sale of rental property #2, net of the $25,000 needed for improvements in property #1, as a down payment towards the purchase a new rental property (residential sixplex). The cost of the new property was $950,000, of which $150,000 related to the cost of the land. This property sale closed on August 1, 2021. Interest on the $667,000 mortgage is $11,673 for the last five months of the year. He was able to rent the building's units to a business professional beginning in September with cash flows as follows: Gr Ex Gary's 2020 earned income for RRSP purposes was correctly calculated to be $78,500. His T-4 from his employer showed a pension adjustment of \$11,784 for 2020 . Gary contributed the following to his RRSP relating to 2021: Prior to 2021, Gary has always maximized his RRSP contributions. Heather has provided you with the following details regarding her activities for 2021. Heather owns a chocolate shop located in Brentwood Mall. She runs it as a sole-proprietorship without her husband's involvement. Allen and Bennet help out every Saturday at the shop. Neither receives a salary for their work. Heather pays for their sporting events and clothing so she does not feel she should pay them a wage. The income statement for 2021 and other information for Heather's chocolate shop are below: Additional information related to Heather's chocolate shop: The opening UCC balances at January 1, 2021 were as follows: During 2021 , Heather purchased the following depreciable assets for her business: In April 2021, Heather sold her owned business premises (consisting of land and a Class 1 building) and moved to a spot in Brentwood Mall, which is currently being leased. She received proceeds of $120,000 for the land (original cost of $75,000 ). The details of the sale of the former class 1 building, as well as the other depreciable assets sold during 2021 , are set out below: ACCT 2303 - Personal tax case #3 Fall 2022 During 2021, Heather purchased the client list from a competitor who was going out of business. She paid $37,000 for this list. The customer list had an indefinite life. Heather has the following loss carry-overs from prior years: - Non-capital loss from 2020 of $17,000 - Capital loss of $25,000, from the sale of shares that occurred in 2009 Heather is a partner in a partnership and owns 10% of the total units. During 2021 , the partnership earned total income of $45,000. Heather is entitled to 10% of the income. Of the $45,000,25% was from taxable capital gains, 50% was business income and the remaining balance was interest income. Heather has $42,000 in RRSP contribution room (not including the 2021 contribution room). Heather has not made any contributions to an RRSP this year. During 2021, Heather and Gary made the following selected expenditures: Care for the children: dditional information: 1. Medical expenses paid from January 1 to December 31, 2021 for the family are listed below. The family had nn mediral exnencec in onjn Gary's daughter Tessa has very poor eyes. It costs $1,500 to buy her special contact lenses. Even with the contact lenses, she can barely function and cannot obtain regular employment. As a result, Tessa's only source of income is scholarship from her school for $3,500. In spite of these hardships, she is attending the local university and with the aid of special equipment purchased in January 2021 for $10,000, is doing quite well. Tessa's tuition for the eight months that she will be in full-time attendance is $4,200. Tessa continues to live at home while she attends university. 2. Heather and Gary both believe in giving back and as such, made contributions to registered charities of $750 and 1,300 respectively in 2021 . They have made contributions to registered charities for the past 10 years