Scenario A

Joe (age 54) took over his fathers paving business and now works with his brother in law. Joe has 3 kids Charlotte age 12, Ashley age 19 and Brian age 23. The paving business has been quite profitable. Joes wife Amy (age 48) works part-time as a hair stylist pursuing her passion. Since they are quite well off she never really had to work much.

Joe and Amy have been mindful of saving throughout the years and have the following accounts:

Joes RRSP $254,250 invested in equity mutual funds naming his wife as beneficiary

Joes non-registered account $163,025 invested in stocks

Joes TFSA account $45,220 naming Brian as beneficiary

Amys TFSA account $51,860 naming Ashley as beneficiary

Since they have not named Charlotte as beneficiary of any accounts they would like to pass on some funds from the non-registered account to her to make is more even for all of their kids. They are planning on transferring $50,000 from the non-registered account to an account for Charlotte. Another concern is that Amy has no retirement savings and little income. They are thinking of taking the remaining funds from the non-registered account after transferring $50,000 to Charlotte and having that in Amys name so that she can use this for retirement savings. Assume there is no loan between Joe and Amy.

In addition, Joe wants Brian to take over the business when he retires. Brian has been working there for a few years now and is learning how each aspect of the business functions. Ashley currently works as a secretary at a real estate office and part-time for the paving business as well. Ashley is paid a salary from the paving business of $70,000 annually.

Required:

Identify and discuss 2 income attribution rules related to their plans in the scenario provided.