-Taxation Question-
You are a CPA working in a tax group of a medium-sized accounting firm, Smith & Ross LLP. This morning, the partner of a tax group approached you regarding new clients, Cali and Tobey Carson. Cali is a 50-year-old pharmacologist living in Calgary, AB. Tobey, aged 55, is a partner at a large law firm in Calgary. Tobey and Cali have two children who are currently attending elementary school in Calgary. Tobey and Cali are starting to look forward to retirement and would like professional advice in effectively planning for their retirement. The partner would like you to calculate Cali and Tobey's Registered Retirement Savings Plan (RRSP) contribution room for the current year, 2020, since this information will assist in the Carson's retirement planning. The tax partner provides you with the Carson's client file, which includes the Carsons' tax returns from 2019, as well as notes prepared by the partner's administrative assistant after his first meeting with the couple. The file and notes contain the following information:
''s request and calculate the RRSP contribution room for both Cali and Tobey in 2020. i Part 2 of additional information X The following day, the tax partner informs you that the Carsons have indicated that they have made the following contributions to various RRSP accounts during 2020. On March 20, Tobey made a $12,000 contribution to his RRSP account at TD Bank. On July 3, Tobey made a $4,500 contribution to a spousal RRSP account for Cali at Royal Bank. On November 12, Tobey made a $2,500 contribution to an RRSP account in his own name at TD Bank. On September 3, Cali made a $7,000 contribution to an RRSP account in her own name at Scotiabank. Print Done Dox and then click Check Answer. * Cali was previously married. According to her divorce agreement, she must make monthly payments for the maintenance of her former spouse of $900. Cali indicated that she has always made all required spousal support payments. A copy of Cali's T4 slip for 2019 shows gross salary of $64,000. From this amount, the employer withheld the following amounts. . . Income tax: $15,600 CPP: maximum for the year (see the Tax Rate sheet) El: maximum for the year (see the Tax Rate sheet) Registered Pension Plan (RPP): $1,700 Pension Adjustment: $3,900 Other relevant information from Cali's tax return for 2019 is shown below. . Actual amount of eligible dividends: $5,000 Interest income: $3,7002DB Unused RRSP deduction room at the end of 2019: $4,800 A copy of Tobey's statement of partnership income from the previous year shows that his income earned as an active partner was $305,000. Tobey's law firm does not provide pension plans for its partners. Tobey owns a rental property and reported a net rental loss of $3,600 on his 2019 tax return. Tobey owns some farm land in Alberta. There is an oil well located on this land, and Tobey receives some resource royalty income each year. In 2019, Tobey earned royalty income of $6,450.6 Other relevant information from Tobey's 2019 tax return: Actual amount of ineligible dividends: $12,20000 Interest income: $8,500 Unused RRSP deduction room at the end of 2019: $600.00 . ''s request and calculate the RRSP contribution room for both Cali and Tobey in 2020. i Part 2 of additional information X The following day, the tax partner informs you that the Carsons have indicated that they have made the following contributions to various RRSP accounts during 2020. On March 20, Tobey made a $12,000 contribution to his RRSP account at TD Bank. On July 3, Tobey made a $4,500 contribution to a spousal RRSP account for Cali at Royal Bank. On November 12, Tobey made a $2,500 contribution to an RRSP account in his own name at TD Bank. On September 3, Cali made a $7,000 contribution to an RRSP account in her own name at Scotiabank. Print Done Dox and then click Check Answer. * Cali was previously married. According to her divorce agreement, she must make monthly payments for the maintenance of her former spouse of $900. Cali indicated that she has always made all required spousal support payments. A copy of Cali's T4 slip for 2019 shows gross salary of $64,000. From this amount, the employer withheld the following amounts. . . Income tax: $15,600 CPP: maximum for the year (see the Tax Rate sheet) El: maximum for the year (see the Tax Rate sheet) Registered Pension Plan (RPP): $1,700 Pension Adjustment: $3,900 Other relevant information from Cali's tax return for 2019 is shown below. . Actual amount of eligible dividends: $5,000 Interest income: $3,7002DB Unused RRSP deduction room at the end of 2019: $4,800 A copy of Tobey's statement of partnership income from the previous year shows that his income earned as an active partner was $305,000. Tobey's law firm does not provide pension plans for its partners. Tobey owns a rental property and reported a net rental loss of $3,600 on his 2019 tax return. Tobey owns some farm land in Alberta. There is an oil well located on this land, and Tobey receives some resource royalty income each year. In 2019, Tobey earned royalty income of $6,450.6 Other relevant information from Tobey's 2019 tax return: Actual amount of ineligible dividends: $12,20000 Interest income: $8,500 Unused RRSP deduction room at the end of 2019: $600.00
