Tax Software Assignment Problem Four - 1 This problem is continued in Chapter 11. DISCLAIMER: All characters appearing in this problem are fictitious. Any resem- blance to real persons, living or dead, is purely coincidental. Mr. Buddy Musician (SIN 527-000-061) was born in Vancouver on August 28, 1951. He has spent most of his working life as a pianist and song writer. He and his family live at 111 WWW Street, Vancouver, B.C. V4H 3W4, phone (604) 111-1111. Mr. Musician's wife, Natasha (SIN 527-000-129), was born on June 6, 1993. She and Mr. Musician have four children. Each child was born on April 1 of the following years, Linda; 2013, Larry: 2014, Donna; 2015, and Donald; 2016. Natasha's only income during 2018 is $3,000 from singing engagements. Buddy and Natasha Musician have two adopted children. Richard (SIN 527-000-285) was born on March 15, 2001 and has income of $2,800 for the year. Due to his accelerated schooling, he started full time attendance at university in September of 2018 at the age of 17. His first semester tuition fee is $3,000 and he requires books with a total cost of $375. These amounts are paid by Mr. Musician. The other adopted child, Sarah, was born on September 2,1998, and is in full time attendance at university for all of 2018 (including a four month summer session). Her tuition is $9,600 and she requires textbooks which cost $750. These amounts are also paid by Mr. Musician. Sarah has no income during the year. Neither Richard nor Sarah will have any income in the next three years. They both have agreed that the maximum tuition amount should be transferred to their father. Mr. Musician's mother, Eunice, was born on April 10, 1931 and his father, Earl, was born on November 16,1929. They both live with Mr. Musician and his wife. While his father has some mobility issues, he is not infirm. His mother is legally blind. Eunice Musician had income of $9,500 for the year, while Earl Musician had income of $7,500. Other information concerning Mr. Musician and his family for 2018 is as follows: CS Scanned with CamScanner 1. Mr. Musician earned $ 16,500 for work as the house pianist at the Loose Moose Pub. His 14 showed that his employer withheld $500 for income taxes and $293.90 for El. No CPP was withheld as he has previously filed an election to stop contributing to the CPP. 2. During the year, MiMusician made his annual $3,000 donation to Planned Parenthood Oi Canada, a registered Canadian charity. 3. Mr. Musician has been married before to Lori Musician (SIN 527-000-319). Lori is 52 years old and lives in Fort Erie, Ontario. Mr. Musician has two additional children who live with their mother, Ms. Dolly Nurse (SIN 527-000-582), in Burnaby, British Columbia. The children are Megan Nurse, aged 12 and Andrew Nurse, aged 14. Neither child has any income during 2018. While Ms. Nurse and Mr. Musician were never married, Mr. Musician acknowledges that he is the father of both children. Although Buddy has provided limited financial aid by paying their dental and medical expenses, the children are not dependent on Buddy for support. Mr. Musician wishes to claim all his medical expenses on a calendar year basis. On December 2, 2018, Mr. Musician paid dental expenses to Canada Wide Dental Clinics for the following individuals: Himself $1,200 Natasha (wife) 700 Richard (adopted son) 800 Sarah (adopted daughter) 300 Linda (daughter) 100 Earl (father) 1,050 Lori (ex-wife) 300 Dolly Nurse (mother of two of his children) 675 Megan Nurse (daughter of Dolly Nurse) 550 Total $5,675 6. Mr. Musician signed a contract with Fred Nesbitt on January 13, 2018 to do permanent modifications to his house. The contract was for the installation of ramps with sturdy hand railings outside his front and back doors to give his parents easier access to the house and modifications to their bathroom so they would be less likely to fall when using the shower. The contract price was $5.800. As neither of his parents has a severe and prolonged mobility impairment, these expenditures are not eligible medical expenses. 7. Mr. Musician paid four quarterly instalments of $1,000 each (total of $4,000) for 2018, as requested on his Instalment Reminders from the CRA. He paid each instalment on the due date. 8. Assume that Mr. Musician has not applied to receive either OAS or CPP benefits. Required: With the objective of minimizing Mr. Musician's Tax Payable, prepare Mr. Musi- cian's 2018 income tax return using the Profile tax software program assuming Natasha does not file a tax return. List any assumptions you have made, and any notes and tax planning issues you feel should be placed in the fila Scanned with CamScanner Tax Software Assignment Problem Four - 1 This problem is continued in Chapter 11. DISCLAIMER: All characters appearing in this problem are fictitious. Any resem- blance to real persons, living or dead, is purely coincidental. Mr. Buddy Musician (SIN 527-000-061) was born in Vancouver on August 28, 1951. He has spent most of his working life as a pianist and song writer. He and his family live at 111 WWW Street, Vancouver, B.C. V4H 3W4, phone (604) 111-1111. Mr. Musician's wife, Natasha (SIN 527-000-129), was born on June 6, 1993. She and Mr. Musician have four children. Each child was born on April 1 of the following years, Linda; 2013, Larry: 2014, Donna; 2015, and Donald; 2016. Natasha's only income during 2018 is $3,000 from singing engagements. Buddy and Natasha Musician have two adopted children. Richard (SIN 527-000-285) was born on March 15, 2001 and has income of $2,800 for the year. Due to his accelerated schooling, he started full time attendance at university in September of 2018 at the age of 17. His first semester tuition fee is $3,000 and he requires books with a total cost of $375. These amounts are paid by Mr. Musician. The other adopted child, Sarah, was born on September 2,1998, and is in full time attendance at university for all of 2018 (including a four month summer session). Her tuition is $9,600 and she requires textbooks which cost $750. These amounts are also paid by Mr. Musician. Sarah has no income during the year. Neither Richard nor Sarah will have any income in the next three years. They both have agreed that the maximum tuition amount should be transferred to their father. Mr. Musician's mother, Eunice, was born on April 10, 1931 and his father, Earl, was born on November 16,1929. They both live with Mr. Musician and his wife. While his father has some mobility issues, he is not infirm. His mother is legally blind. Eunice Musician had income of $9,500 for the year, while Earl Musician had income of $7,500. Other information concerning Mr. Musician and his family for 2018 is as follows: CS Scanned with CamScanner 1. Mr. Musician earned $ 16,500 for work as the house pianist at the Loose Moose Pub. His 14 showed that his employer withheld $500 for income taxes and $293.90 for El. No CPP was withheld as he has previously filed an election to stop contributing to the CPP. 2. During the year, MiMusician made his annual $3,000 donation to Planned Parenthood Oi Canada, a registered Canadian charity. 3. Mr. Musician has been married before to Lori Musician (SIN 527-000-319). Lori is 52 years old and lives in Fort Erie, Ontario. Mr. Musician has two additional children who live with their mother, Ms. Dolly Nurse (SIN 527-000-582), in Burnaby, British Columbia. The children are Megan Nurse, aged 12 and Andrew Nurse, aged 14. Neither child has any income during 2018. While Ms. Nurse and Mr. Musician were never married, Mr. Musician acknowledges that he is the father of both children. Although Buddy has provided limited financial aid by paying their dental and medical expenses, the children are not dependent on Buddy for support. Mr. Musician wishes to claim all his medical expenses on a calendar year basis. On December 2, 2018, Mr. Musician paid dental expenses to Canada Wide Dental Clinics for the following individuals: Himself $1,200 Natasha (wife) 700 Richard (adopted son) 800 Sarah (adopted daughter) 300 Linda (daughter) 100 Earl (father) 1,050 Lori (ex-wife) 300 Dolly Nurse (mother of two of his children) 675 Megan Nurse (daughter of Dolly Nurse) 550 Total $5,675 6. Mr. Musician signed a contract with Fred Nesbitt on January 13, 2018 to do permanent modifications to his house. The contract was for the installation of ramps with sturdy hand railings outside his front and back doors to give his parents easier access to the house and modifications to their bathroom so they would be less likely to fall when using the shower. The contract price was $5.800. As neither of his parents has a severe and prolonged mobility impairment, these expenditures are not eligible medical expenses. 7. Mr. Musician paid four quarterly instalments of $1,000 each (total of $4,000) for 2018, as requested on his Instalment Reminders from the CRA. He paid each instalment on the due date. 8. Assume that Mr. Musician has not applied to receive either OAS or CPP benefits. Required: With the objective of minimizing Mr. Musician's Tax Payable, prepare Mr. Musi- cian's 2018 income tax return using the Profile tax software program assuming Natasha does not file a tax return. List any assumptions you have made, and any notes and tax planning issues you feel should be placed in the fila Scanned with CamScanner