Using ProFile from Intuit Canada. If you dont use ProFile please provide all pdf's and readable copies of the entire tax return with all relevant schedules, forms, and worksheets.

complete the tax return (Form T1) for Mr. James Doode and his common-law partner, Susan Bond, for the 2020 taxation year, including all relevant schedules, forms and worksheets, e.g. Form T2125 for the calculation of business income, T776 for the rental income, etc. Ignore all GST/HST aspects.

T4 Protected B when completed / Protg B une fois rempli Clear Data Employer's name - Nom de l'employeur 11 Lanade Revenue Agence du revenu Agency JAMES' SPECIALTY BIKE SHOP Year Statement of Remuneration Paid 124 MAIN STREET Anne 2020 tat de la rmunration paye ANYTOWN, ONTARIO Employment income-line 10100 KOH 1H0 Income tax deducted-line 43700 Revenus d'emploi - Igne 10100 Impt sur le revenu reter-lone 43700 14 25,000.00 22 5,000.po 54 Employers account number / Numero de compte de l'employeur Province of employment Employee's CPP contributions - line 30300 El nourable earings Province dempiol Cotisations de l'employ au RPC-Igne 30900 Gains assurables d'AE XXXXXXXXXXXXXXX 10 ON 16 1.128.75 24 25,000.po Social Insurance number Exempt - Exemption Numero d'assurance sociale CPP/OPPE PPIP Employment code Employee's OPP contributions -Ilne 30800 CPPQPP pensionable eamings 12 130692544 28 Code d'emploi Cotisations de l'employ au RR-igne 30800 Gains ouvrant droit pension-RPCARRO 29 17 26 25.000.po RPCIRRG AE RPAP Employee's El premiums-ine 31200 Union dues-line 21200 Employee's name and address - Nom et adresse de l'employe Cotisations de l'employe a TAE-Igre 31200 Cotations syndicales - Igne 21200 Lastninapbx) - Nom de familles moules 18 44 Fistmerem 395 po BOND SUSAN RPP contributions - Ine 20700 Charitable donations - line 34900 Cotisations un RPA-igne 20700 Dons de bienfaisance - Igre 34900 20 46 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Pension adjustment -Iline 20500 Facteur d'equivalence-igne 20500 RPP or DPSP registration number N' dagrment d'un PA ou d'un RPDS 52 50 Employee's PPIP premium - see over Cotations de l'employ au RPAP-voir su verso 55 PRIP Insurable earnings Gains assurables du RPAP 56 Box- Case Amount-Montant BOX-Case Amount-Montant BOX-Cade Amourt-Montant Other Information (see over) Box Case Amount - Montant Box-Case Amount-Montant Bar-Case Amourt-Montant T4 (19) Autres renseignements (voir au verso) Employer's name - Nom de l'employeur T4 11 Sanade Revenue Agence du revenu Agency Year Statement of Remuneration Paid Anne tat de la rmunration paye Employment income-Ine 10100 Income tax deducted line 43700 Revenus d'emploi - Igne 10100 Impot sur le revenu retenu - Igne 43700 14 54 Employer's account number / Numero de compte de l'employeur Province of employment Employee's CPP contributions - line 30300 Province d'emploi Cotisations de l'employ au RPC-Igne 30800 10 16 El nourable earings Gains assurables d'AE 24 Social Insurance number Numero d'assurance sociale Exempt - Exemption CPP OPP EI PPIP 28 Employment code Code demploi 29 Employee's OPP contributions in 30000 Cotisations de l'employ au RRQ-igne 30800 12 OPPIOPP pensionable eaming Gains ouvrant droit pension - RPCARRO 26 RFCURRE AE RPAP Union dues-line 21200 Cotations syndicales - Igne 21200 when completed / Protg B une fois rempli Employee's El premiums-Ine 31200 Cotisations de l'employe a TAE - Igre 31200 18 Employee's name and address - Nom et adresse de remploye Latinable) -Nom de tamil actres moule Fit-Priem 44 RPP contributions-ine 20700 Cotisations un RPA-ligne 20700 Charitable donations line 34900 Dons de bienfaisance - Igne 34900 20 46 Pension adjustment -Iine 20500 Facteur d'equivalence - lgne 20500 RPP or DPSP registration number N' dagrment d'un RPA ou d'un RPDE 50 52 Employee's PPIP premiums - see over Cotations de l'employ au RPAP - voir su verso 55 PPIP insurable earnings Gains assurables du RPAP 56 Protected Box-Case Amount-Montant BOX-Care Amount-Montant Bar-Case Amount - Montant Other Information (see over) Box Case Amount-Montant Bax-Case Amount-Montant Box- Case Amount-Montant T4(19) Autres renseignements (voir au verso) 1. Canada Rowenue Agence du revenu du Canada Payer's name Nom du payur CAF REGISTERED PENSION PLAN 101 COLONEL BY DRIVE OTTAWA, ONTARIO K1A OK2 Year Agency 2020 Anne T4A statement of Pansion, Retirement, Annuity, and Other Income tat du revenu de pension de retraite, de rente ou d'autres sources 05 Peyers account number / Numero de compte du peye XXXXXXXXXXXXXXX Social insurance number Recipients account number Nurodance sociale Nurde de compte du beneficiare 527000145 013 Pension of superannuation-line 11500 Prestations de retraite ou au Income tax deducted -ine 43700 pensions-ligne 11500 Impet sur le revenue 43700 016 50,000.00 022 8,000.00 Lumpur paymentine 13000 Self-employed commission Paiement forfaite-ligne 13000 Commission d'un travel indipendent 018 020 012 Armum Parts Fee for Honorum pour service and Reolplant's name and address - Nom et adresse du beneflolaire Last - Nom de taille moi Free-Phinen DOODE JAMES 024 048 Other information see page 2) Autres renseignements (voir la page 2) 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Bax-Core Amount - Montent Box- Amount - Monta BoCase Amount-Mart Bex.co Amount - Montant B-C Amount-Montant Bex-Case Amount - Montent Be-Co Amount-Montant Bex- Amount-Manbart Bes-C Amount - Montent Bex-Cese Amount-Mart BC Amount - Montent Bex- Amount - Monet Payer's name - Nom du peur Agence de revenu du Canada 11 Sanade ovenue Agency Year Anne T4A statement of Pansion, Retirement, Annuity. and Other Income Etat du revenu de pension, de retraite, de rente ou d'autres cours Pension of superannuation-line 11500 Prestations de leo pensionslyne 11500 Income tax deducted -ine 43700 Impot sur le revenu retenu - igre 43700 051 Peyer sccount number / Numero de compte du piye 016 022 Social insurance Tube Nurodance sociale Recipient's account number Nurdire de compte du beneficiare Lumpumpamine 18000 Palement forf-ligne 13000 Self-employed com Commission du travail indipendent 012 013 016 020 Armuta Roolpient's name and address - Nom et adirecce du beneflolaire Last Mint-Nom de talent man Phinen Honoraires ou autres sommes pour service renda Intel-In 024 048 Other information (see page 2) Autres renseignements (voir la page 2) Bas-Case Amount - Montent Bex-Con Amount-Martin Box Case Amount - Montant Bex. Ca Amount-Mart Bos.com Amount - Montent Bex-Cese Amount - Montent Box Case Amount. Mortar Bex- Cine Amount - Montant Boca Amount - Montent Box.Co Amount Mantan Box Case Amount - Monta Amount - Montant Clear Data Report those amounts on your tax return. Box 016. Pension of superannuation - Enter the amount on line 11500. It may qualify for the perion income amountseaine 31400 in your las guide). See line 11500 and 13000 in your bax guide The amount in the following box is included in box 018 * Box 124 Vas bersalig ble for person i-See Form To Joint Election to Split Person Income Box 018 Lumpsum payments - Enter the amount on ne 18000 The amounts in the following bexim are included in box 018 . Box 102. Lumpsum payments -noident services transferred under peragraph 606 Bex 10. Lumpam payment from registered pension plan that you cannot Box 048 Fees for services - Report this amounts busier professional income Box 120 Tax deferred cooperative shere. This amount may be deleted. For more information Line Seos - Petronage dividence in Guide T4002 Self-employed Busine Profesional ilon, Farming and Fishing income Box 133, Variable pension bens-Seine 11500 in your tax guide Box 135, Recipient-paid premiums for private health services plans-Seine 33090 in your tax guide Box 19-Tuition assistance for adult basic education Il Canada Revenue T5 Statement of Investment Income Agence du revenu du Canada tat des revenus de placement Dividend from Cardin corporations-Dividendes de canadiennes Federal credit - Credits Actualmente dividende 2s Teclamount of eligible dividende 25 Dividend te dividende 7,000.00 9,860.00 1,450.93 Mortant de dividendes termins Montent importe de dividende Crdit d'imp pour videre Adhuc mount of dividende 11 Table meurt of dividende other than lide dividende 12 Dividend beredar darde nelig ble derde other than alle derde Clear Data Year Protected B / Protg B 2020 when completed / une fois rempli Annde 13 Interest from Canadian sources 18 Capital gains dividends 10 Interats de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type O 527000145 1 Code du feuillet Nundroidenticton du bondaire Type de bench Nutres de dividendes termini Creditmpt pour vidende warum die dividendes Series Montre de dividendes tres de dividendes de Other Information (see the back) Autres renseignements (gee verso) Box / Case Amount / Montant Box / Case Amount / Montant Box / Case Amount / Montant Recipients name (last name first and address - Nom, prnom et adresse du beneficiaire JAMES DOODE 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Payer's name and address-Nom et adresse du payeur GREAT BANK OF CANADA 456 BAY STREET TORONTO ONTARIO M5J 2J5 Currency and Identificaton codes Code de devise et dhdentication Foreign currency Transit-Succursale Devises etrangeres See the privacy notice on your retum/ Cornulevia de confians votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numero de compte du beneficiaire Canada Revenue Agence du revenu Agency du Canada T5 Statement of Investment Income tat des revenus de placement Dividend from Cardin corporations-Dividendes de canadiennes Federal credit - Credits Actal curt tigble dividende 2 Telemount of eligible dividende 28 Dividend te dividende Year Protected B / Protg B when completed / une fois rempli Annde 13 Interest from Canadian sources 18 Capital gains dividends Mortant rial can dividerla determinds Adhuc mount of dividende other than it dividende Montent Impoble de dividende Selemade Table rourt of dividende other than the Credit d'imp pour dividende 12 Dividend box credit for didende other than ble dividende Interits de source canadienne Dividendes sur gains en capital Report Code 22 Recipient identification number 23 Recipient type 10 11 Mantenimpose des dividendes Credit hp pour videre regur de dividendes em Code du feuillet Nundroidenticton du bondaire Type de reci Mare dividendes res que des dividendes de Other information see the back) Autres renseignements Isez le verso) Box Case Amount / Montant Box Case Amount / Mentant Box Case Amount / Montant Recipients name (last name frst) and address - Nom, prnom et adresse du bene claire Payer's name and address-Nom et adresse du payeur Currency and identification codes Codes de device et d'identification Foreign currency Transit-Succursale Devises etrangeres See the privacy notice on your retum/ Consultavia de confidentielle dans votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numero de compte du beneficiaire T5 Statement of Investment Income Canada Revenue Agence du revenu Agency du Canada tat des revenus de placement Divided from Cardin corporations-Dividendes de canadiennes Federal credit - Credits Actual amount of alle dividende 25 Telemount of ligbeddende 26 Dividend scredit tregole dividende Year Protected B / Protg B when completed / une fois rempli Annde 13 Interest from Canadian sources 18 Capital gains dividends Mortent des dividendes termini Actus est of dividende other than libe dividende Montent importe de dividende Table out of dividende other than lg ble sideda Crdit d'imp pour dividendesine 12 Dividend be credit for didende other than eligible dividende Interats de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type 10 11 Mantenimpa didende were dividende Credits pour vidende stregua de dividende minds Code du feuillet Nundroidenticton du bondaire Type de dcles Mortal de dividendes autre que es dividendes de Other Information see the back) Autres renseignements (sez le verso) Box Case Amount / Montant Box / Case Amount / Montant Box / Case Amount / Montant Recipients name (last name fret) and address - Nom prnom et adresse du beneficiaire Payer's name and address-Nom et adresse du payeur T5 Statement of Investment Income Canada Revenue Agence du revenu Agency du Canada tat des revenus de placement Dividends from Canadian corporations - Dividendes de societes canadiennes Federal credit - Credit federal 24 Actual amount of eligible dividends 25 Taxable amount of eligible dividends 26 Dividend tax credit for eligible dividends Clear Data Year Protected B / Protg B 2020 when completed / une fois rempli Anne 13 Interest from Canadian sources 18 Capital gains dividends 5,000.00 Intrts de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type O 527000145 2 Code du feuillet Numro d'identification du bnficiaire Type de bnficiaire Montant rel des dividendes determines Actual amount of dividends other than eligible dividends Montant imposable des dividendes determines Taxable amount of dividends other than eigble dividends Credit d'impt pour dividendes determines 12 Dividend tax credit for dividends other than eligible dividends 10 11 Credit d'impt pour dividendes autres que des dividendes determines Montant rel des dividendes Montant imposable des dividendes autres que des dividendes determines autres que des dividendes determines Other information (see the back) Autres renseignements (lisez le verso) Box / Case Amount / Montant Box / Case Amount / Montant Box / Case hount/Montant Recipient's name (last name first) and address - Nom, prnom et adresse du bnficiaire JAMES DOODE (50%) AND SUSAN BOND (50%) 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Payer's name and address - Nom et adresse du payeur ANYTOWN BANK OF CANADA 456 MAIN STREET ANYTOWN ONTARIO | 1 29 Currency and identification codes 28 Codes de devise et d'identification Foreign currency Transit - Succursale Devises trangres See the privacy notice on your retum. Consultez l'avis de confidentialite dans votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numro de compte du bnficiaire Year Canada Revenue Agence du revenu Agency T5 Statement of Investment Income du Canada tat des revenus de placement Dividends from Canadian corporations - Dividendes de societes canadiennes Federal credit - Credit federal 24 Actual amount of eligible dividends 25 Taxable amount of eligible dividends 26 Dividend tax credit forligible dividends Protected B/ Protg B when completed / une fois rempli Capital gains dividends Anne 13 Interest from Canadian sources 18 Montant rel des dividendes determines Actual amount of dividends other than eligible dividends Montant imposable des dividendes determines Taxable amount of dividends other than elgible dividends Credit d'impot pour dividendes determines 12 Dividend tax credit for dividends other than ellgible dividends Intrts de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type 10 11 Credit dimpot pour dividendes autres que des dividendes determines Code du feuillet Numro d'identification du bnficiaire Type de bnficiaire Montant rel des dividendes Montant imposable des dividendes autres que des dividendes determines autres que des dividendes determines Other information (see the back) Autres renseignements lisez le verso) Box / Case Amount / Montant Box / Case Amount / Montant Box / Case Amount / Montant Recipient's name (last name first) and address - Nom, prnom et adresse du bnficiaire Payer's name and address - Nom et adresse du payeur Currency and identification codes Codes de devise et d'identification Foreign currency Transit-Succursale Devises trangres See the privacy notice on your return. Consultez l'avis de confidentialite dans votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numro de compte du bnficiaire Canada Como Aconca dhuron Statamant of Instant Insama Year Protected B/Protg Clear Data VOID ANNUL 10 Report code 13 Year Anne 2020 Code du feuillet 0 Agence du revenu du Canada 11 Recipient type Type de bnficiaire 1 Foreign currency Devises trangres 12 Recipient identification number Numro d'identification du bnficiaire 527-000-145 Protected B / Protg B when completed / une fois rempil T5008 Statement of Securities Transactions Etat des oprations sur titre 14 Date MMDD-MMJJ 12-01 15 Type code of securities 18 Quantity of securities Code de genre de titres Quantit de titres SHS 2,000 17 Identification of securities Dsignation des titres SHARES OF GREAT BANK OF CANADA 18 ISIN/CUSIP number Numro ISIN/CUSIP 19 Face amount Valeur nominale 20 Cost or book value Cot ou valeur comptable 42.000.00 1+Canada Revenue Agency 21 Proceeds of disposition or settlement amount Produits de disposition ou paiements 144,000.00 22 Type code of securities received on settlement Code de genre de titres reus en guise de rglement 23 Quantity of securities received on settlement Quantit de titres reus en guise de reglement 24 Identification of securities received on settlement Dsignation des titres reus en guise de rglement Name and address of trader or dealer in securities Nom et adresse du ngociant ou du courtier en valeurs Last name (print) - Nom de famille (en lettres moules) First name and Initials - Prnom et Initiales DOODE, JAMES 123 MAIN STREET ANYTOWN ON KOH 1HO Recipient Bnficiaire ABC SECURITIES BROKER 1000 MAIN STREET ANYTOWN ON KOH 1HO See the privacy notice on your return. Consultez l'avis de confidentialite dans votre dclaration. T5008 (19) Year Anne VOID ANNULE 10 Report code Code du feuillet 11 Recipient type Type de bnficiaire 12 Recipient identification number Numro d'identification du bnficiaire 13 Foreign currency Devises trangres Agence du revenu du Canada Protected B / Protg B when completed / une fois rempil T5008 Statement of Securities Transactions Etat des oprations surtitres 14 Date MMDD-MMJJ 15 Type code of securities 18 Quantity of securities Code de genre de tres Quantit de titres 17 | Identification of securities Dsignation des titres Lanado Revenue 18 | ISIN/CUSIP number Numro ISIN /CUSIP 19 Face amount Valeur nominale 20 | Cost or book value Cot ou valeur comptable 21 Proceeds of disposition or settlement amount Produits de disposition ou paiements Agency 22 Type code of securities received on settlement Code de genre de titres reus en guise de rglement 23 Quantity of securities received on settlement Quantit de titres reus en guise de rglement 24 Identification of securities received on settlement Dsignation des titres reus en guise de rglement Last name (print) - Nom de famille (en lettres moules) First name and Initials - Prnom et Initiales Name and address of trader or dealer in securities Nom et adresse du ngociant ou du courtier en valeurs Recipient Bnficiaire See the privacy notice on your return. Consultez l'avis de confidentialite dans votre declaration. T5008 (19) INFORMATION TO USE FOR THE TAX RETURN CASE STUDY: James Doode decided to start his own business in 2019 after retiring from the Canadian Armed Forces. Upon retirement in 2018, James elected to receive immediate monthly pension payments from his former employer's pension plan. James' business consists of a motorcycle shop known as James' Specialty Bike Shop, selling and repairing motorcycles (in du stry code 441220). James proudly specializes in customizing motorcycles to very exclusive clients. James hired you to prepare his personal tax return for the year 2020, as well as for his common-law partner, Susan Bond. James and Susan want to pay the very least tax possible. They will use any election or choice legally available to them to achieve that objective. James'income is mainly from his pension and personal business, while Susan's income is mainly from her salary as bookkeeper for James' business. Attachedis an Appendix showing the relevant financial information pulled from the accounting records for James' business. The amounts shown have not been adjusted for tax purposes. James expects you to identify which items are allowed for tax purposes to comply with the tax laws in Canada. James and Susan have other in come from their investments and rental property. Below is the information needed to prepare their tax returns. Tax forms James and Susan received are included on the Case Study link as separate documents confirming the various items of income earned for the year. Detailed Information: James was born on November 1, 1970. He is divorced but currently lives with Susan Bond, his common-law partner, at 123 Main Street, Anytown, Ontario, KOH 1H0. Both have been living together for several years now. James' Social Insurance Number (SIN) is 527-000-145. Susan's SIN is 130-692-544. Susan was born on December 2, 1970 and has been blind since birth but still manages to work as a bookkeeper for James' business - see separate T4 slip attached issued to Susan for 2020 and financial information for James' business in the Appendix below. Susan also has income from joint investments with James - see further below During 2020, James received bi-weekly pension payments from his former employer's pension plan for a total pension income of $50,000 - see T4A slip attached issued to James for 2020 (box 16). Federal income tax of $8,000 was withheld at source on th at pension income- see box 22 of the T4A slip. James has spousal support obligations from his previous marriage. He is required to pay $1,000 per month to his former spouse (Mary Roode: SIN: 527- 000-129) in accordance with a court order. During the year 2020, James was only able to pay 3 months worth of support. James and Susan have no children but James' older brother Ricklives with them on a permanent basis since 2016 as he cannotlive on his own due to a permanent mental disability. Rick was born on June 10, 1966 and has $8,000 of social assistance income for 2020 under the Ontario Disability Support Program. His SIN is 527-000-947. Forms T2201 have already been filed with CRA in previous years for both Susan and Rick and their condition has not changed since. During 2020, James received $7,000 of eligible dividends on shares he owns of the Great Bank of Canada, a Canadian public company - see the T5 slip James received from the bank (box 24) for 2020. No income tax was with held on that dividend. James and Susan earned interest income for a total of $5,000 during 2020 from a joint investment account(co-owned 50% each)- see the T5 slip James and Susan received from the bank as Co-owners (box 13). No income tax was with held on that income. During the year 2020, James sold 2,000 shares of the Great Bank of Canada (a publicly traded company) that he had acquired over the last 10 years with an average cost of $21.00 per share. The shares were sold on June 1, 2020 at a price of $72.00 per share, on which a 1% commission was paid to a broker ($0.72 per share). Rental Activities James and Susan acquired jointly (50% each) a residential property during 2020 which they rentout to earn income. The property was acquired on February 1, 2020 and rented-out for a 1-year period to a youngfamily th at recently moved to the area for $3,500/month. Below is the information relating to that property for 2020, which is co-ownedin equal share by James and Susan (50% each): Address: 121 Main Street, Anytown, ON (co-owned by James and Susan equally. 50% each) Cost of property purchased: $395,000 of which $55,000 was for the land. Cost of additions made to the building in October 2020: $90,000 (addition of a garage). Due to this addition, it was agreed th at the rent for the home will increase to $4,000/month starting November 1, 2020. $36,000 Revenues Gross Rents Expenses Property taxes Insurance Interest on mortgage Mortgage principal Regular maintenance & repairs $3,200 1,100 6,300 1,525 3,000 In order to finance the purchase of the rental property, James and Susan solda cottage they also jointly owned (50% each) and used exclusively for their personal enjoyment, located at 123 Beach Lane, Anvlake, ON. They had purchased the cottage back in 2010 at a cost of $60,000. They sold the cottage on June 15, 2020 for $260,000 cash. All transaction costs were borne by the purchaser. James and Susan do not wantto design ate the cottage as their principal residence because they feel their current home has a much greater accrued gain and want to preserve the principal residence tax exemption for th at property instead. James also sold a boat he owned near the cottage. The boat had a cost of $35,000 and was sold for $15,000 on June 20, 2020. James contributed $22,000 into his own RRSP on September 1, 2020. James wants to deduct the maximum amount this year. His unused RRSP Deduction Room at the end of 2019 was $10,500 and his Earned Income for 2019 (business income) was $60,000. He had no Pension Adjustmentfor 2019. Susan also contributed $6,000 to her own RRSP on the same date. Her unused RRSP Deduction Room at the end of 2019 was $1,500 and her Earned Income for 2019 was $20,000. She had no Pension Adjustmentfor 2019. While talking with James, you discovered that as a former member of the Canadian Armed Forces he remains on call for high-risk search and rescue missions. During the year 2020, James worked 275 hours as a volunteer on search and rescue missions for which he did not receive any compensation. Finally, James paid the following medical expenses for the year 2020: Date Patient Nature expense June 1, 2020 James Chiropractor June 5, 2020 Susan Prescriptions Dec 20, 2020 Susan Prescriptions Every 2 months Rick Prescriptions ($600 ea.) TOTAL medical expenses for 2020 Amount $2,000 $ 900 $ 900 $3,600 $7,400 Finally, James paid federal income tax in stalments of $2,500 quarterly to the CRA throughout the year 2020, for a total of $10,000. APPENDIX Accounting Information for 2020 James' Specialty Bike Shop Revenues Motorcycle and Parts Sales $320,000 Expenses Purchase of inventory.parts and supplies (Note 1) Golf club dues (Note 2) Fines and penalties (Note 3) Insurance (Note 4) General office expenses Home Office expenses (Note 5) Salaries (Note 6) Employer contributions to CPP and El Depreciation (Note 7) Loss on sale of equipment(note 7) Truck expenses (Note 8) Total Expenses $110,000 5,000 7,500 5,000 3,000 3,012 58,000 3,960 45,650 8,250 5,700 $255,072 Note 1: The openinginventory on January 1, 2020 was $15,000. The closing inventory on December 31, 2020 was $35,000. Note 2: James joined the local golf club to find new customers. The membership cost was $5,000 for the year. Note 3: In 2019 the business was sued for selling branded motorcycle parts without proper authorization from the brand owner. In early 2020, James reached an out-of-court settlement with the brand owner which provides th at James will pay a penalty of $7,500 for pre-2020 transactions that were completed with out proper authorization, in exchange for the brand owner dropping the charges against him. The penalty was paid February 1, 2020. The agreement also provided th at James would enter into a new distributorship agreement with the brand owner effective January 1, 2020 - see Note 7 below for further details under "Intangible Assets". Note 4: The insurance expense includes the cost of the truck insurance of $2,000 - see Note 8 below. Note 5: Starting January 1, 2020, James moved the bookkeeping office from the shop to his home. A room representing 12% of the 1,000sq.m. home was set aside for the exclusive use of Susan's bookkeeping functions. The home has a cost of $500,000. Below are the costs for 2020 relating to the home office space: Home Insurance $1,500 Interest on mortgage $8,500 Property taxes $5,200 Home telephone line $800 Utilities $5,100 Maintenance and repairs $4,000 TOTAL $25,100 x 12% = $3,012 Note 6: There are 2 employees: one mechanic (George Dewlitle) and one bookkeeper (Susan Bond). George was paid a gross salary of $33,000 for 2020 while Susan was paid a gross salary of $25,000 for 2020. The T4 slip for Susan is included as a separate pdf document to this case study for your information, confirming the CPP contributions ($1,128.75-box 16). El premiums ($395.00 - box 18) and Federal Income tax ($5,000.00 - box 22) with held at source on her salary for 2020 Note 7: The following is the information relating to the fixed assets of the business Building: The building is 3,000 sq.m. located at 124 Main Street, Anytown, ON. A third (1/3) of the surface is used as a showroom for the customised motorcycles. The rest of the building (2/3) is used as a shop for mechanic and customization work. The building was constructed on March 1, 2019 at a cost of $195,000. The UCC for tax purposes (class 1) at the beginning of 2020 was $189,150. Truck: The truck is a Ford F150 extended cab pick-up th at James uses for both business and person al purposes-see Note 8 for operating costs. The truck was purchased on June 1, 2019 at a cost of $55,000. For tax purposes, maximum CCA was deducted in 2019 le nga UCC balance on January 1, 2020 of $25,500 Other Tangible Assets: The following details relate to the other fixed assets used in the business: CCA UCC Balance Description class Jan 1, 2020 Customizing tools and equipment class 53 $9,000 Computer-assisted design equipment class 12 $7,500 Computer class 50 $2,538 Class 53 Customizing tools were acquired on March 1, 2019 at a total cost of $12,000. For tax purposes, maximum CCA was deducted in 2019 leaving a UCC balance on January 1, 2020 of $9,000. Addition al new equipment was acquired on December 1, 2020 at a cost $45,000. Class 12 Computer-assisted design (CAD) equipmentwas acquired on March 1, 2019 at a cost of $15,000. For tax purposes, maximum CCA was deducted in 2019 leaving a UCC balance on January 1, 2020 of $7,500. During 2020, James decided to replace the CAD equipment because it was not performingwell enough for the demands of his growing business. A new more powerful CAD equipmentwas purchased on March 1, 2020 at a cost of $55,000. The vendor of the new equipment accepted to take the old equipmentin exchange. A trade allowance of $3,000 was received for the old equipment. The net book value for accounting purposes was $11,250 resulting in a loss of $8,250 included in the total expenses for accounting purposes for the year. Class 50 Computer hardware was acquired on March 15, 2019 at a total cost of $3,500. For tax purposes, maximum CCA was deducted in 2019 leaving a UCC balance on January 1, 2020 of $2,538. No further additions were made in 2020. Intangible Assets: On January 15, 2020, James signed a new 25-year distributorship agreement with the owner of a well-known motorcycle brand. James paid $100,000 to obtain the 25-year license, which is effective January 1, 2020 Note 8: James has a truck th at heuses for both business and personal purposes. Total distance driven for the year was 29,500km of which 90% were for business (26,550km). Total truck expenses for 2020 paid by the business were as follows (included in the financial information above): Insurance $2,000 Fuel $3,200 Maintenance $2,500 T4 Protected B when completed / Protg B une fois rempli Clear Data Employer's name - Nom de l'employeur 11 Lanade Revenue Agence du revenu Agency JAMES' SPECIALTY BIKE SHOP Year Statement of Remuneration Paid 124 MAIN STREET Anne 2020 tat de la rmunration paye ANYTOWN, ONTARIO Employment income-line 10100 KOH 1H0 Income tax deducted-line 43700 Revenus d'emploi - Igne 10100 Impt sur le revenu reter-lone 43700 14 25,000.00 22 5,000.po 54 Employers account number / Numero de compte de l'employeur Province of employment Employee's CPP contributions - line 30300 El nourable earings Province dempiol Cotisations de l'employ au RPC-Igne 30900 Gains assurables d'AE XXXXXXXXXXXXXXX 10 ON 16 1.128.75 24 25,000.po Social Insurance number Exempt - Exemption Numero d'assurance sociale CPP/OPPE PPIP Employment code Employee's OPP contributions -Ilne 30800 CPPQPP pensionable eamings 12 130692544 28 Code d'emploi Cotisations de l'employ au RR-igne 30800 Gains ouvrant droit pension-RPCARRO 29 17 26 25.000.po RPCIRRG AE RPAP Employee's El premiums-ine 31200 Union dues-line 21200 Employee's name and address - Nom et adresse de l'employe Cotisations de l'employe a TAE-Igre 31200 Cotations syndicales - Igne 21200 Lastninapbx) - Nom de familles moules 18 44 Fistmerem 395 po BOND SUSAN RPP contributions - Ine 20700 Charitable donations - line 34900 Cotisations un RPA-igne 20700 Dons de bienfaisance - Igre 34900 20 46 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Pension adjustment -Iline 20500 Facteur d'equivalence-igne 20500 RPP or DPSP registration number N' dagrment d'un PA ou d'un RPDS 52 50 Employee's PPIP premium - see over Cotations de l'employ au RPAP-voir su verso 55 PRIP Insurable earnings Gains assurables du RPAP 56 Box- Case Amount-Montant BOX-Case Amount-Montant BOX-Cade Amourt-Montant Other Information (see over) Box Case Amount - Montant Box-Case Amount-Montant Bar-Case Amourt-Montant T4 (19) Autres renseignements (voir au verso) Employer's name - Nom de l'employeur T4 11 Sanade Revenue Agence du revenu Agency Year Statement of Remuneration Paid Anne tat de la rmunration paye Employment income-Ine 10100 Income tax deducted line 43700 Revenus d'emploi - Igne 10100 Impot sur le revenu retenu - Igne 43700 14 54 Employer's account number / Numero de compte de l'employeur Province of employment Employee's CPP contributions - line 30300 Province d'emploi Cotisations de l'employ au RPC-Igne 30800 10 16 El nourable earings Gains assurables d'AE 24 Social Insurance number Numero d'assurance sociale Exempt - Exemption CPP OPP EI PPIP 28 Employment code Code demploi 29 Employee's OPP contributions in 30000 Cotisations de l'employ au RRQ-igne 30800 12 OPPIOPP pensionable eaming Gains ouvrant droit pension - RPCARRO 26 RFCURRE AE RPAP Union dues-line 21200 Cotations syndicales - Igne 21200 when completed / Protg B une fois rempli Employee's El premiums-Ine 31200 Cotisations de l'employe a TAE - Igre 31200 18 Employee's name and address - Nom et adresse de remploye Latinable) -Nom de tamil actres moule Fit-Priem 44 RPP contributions-ine 20700 Cotisations un RPA-ligne 20700 Charitable donations line 34900 Dons de bienfaisance - Igne 34900 20 46 Pension adjustment -Iine 20500 Facteur d'equivalence - lgne 20500 RPP or DPSP registration number N' dagrment d'un RPA ou d'un RPDE 50 52 Employee's PPIP premiums - see over Cotations de l'employ au RPAP - voir su verso 55 PPIP insurable earnings Gains assurables du RPAP 56 Protected Box-Case Amount-Montant BOX-Care Amount-Montant Bar-Case Amount - Montant Other Information (see over) Box Case Amount-Montant Bax-Case Amount-Montant Box- Case Amount-Montant T4(19) Autres renseignements (voir au verso) 1. Canada Rowenue Agence du revenu du Canada Payer's name Nom du payur CAF REGISTERED PENSION PLAN 101 COLONEL BY DRIVE OTTAWA, ONTARIO K1A OK2 Year Agency 2020 Anne T4A statement of Pansion, Retirement, Annuity, and Other Income tat du revenu de pension de retraite, de rente ou d'autres sources 05 Peyers account number / Numero de compte du peye XXXXXXXXXXXXXXX Social insurance number Recipients account number Nurodance sociale Nurde de compte du beneficiare 527000145 013 Pension of superannuation-line 11500 Prestations de retraite ou au Income tax deducted -ine 43700 pensions-ligne 11500 Impet sur le revenue 43700 016 50,000.00 022 8,000.00 Lumpur paymentine 13000 Self-employed commission Paiement forfaite-ligne 13000 Commission d'un travel indipendent 018 020 012 Armum Parts Fee for Honorum pour service and Reolplant's name and address - Nom et adresse du beneflolaire Last - Nom de taille moi Free-Phinen DOODE JAMES 024 048 Other information see page 2) Autres renseignements (voir la page 2) 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Bax-Core Amount - Montent Box- Amount - Monta BoCase Amount-Mart Bex.co Amount - Montant B-C Amount-Montant Bex-Case Amount - Montent Be-Co Amount-Montant Bex- Amount-Manbart Bes-C Amount - Montent Bex-Cese Amount-Mart BC Amount - Montent Bex- Amount - Monet Payer's name - Nom du peur Agence de revenu du Canada 11 Sanade ovenue Agency Year Anne T4A statement of Pansion, Retirement, Annuity. and Other Income Etat du revenu de pension, de retraite, de rente ou d'autres cours Pension of superannuation-line 11500 Prestations de leo pensionslyne 11500 Income tax deducted -ine 43700 Impot sur le revenu retenu - igre 43700 051 Peyer sccount number / Numero de compte du piye 016 022 Social insurance Tube Nurodance sociale Recipient's account number Nurdire de compte du beneficiare Lumpumpamine 18000 Palement forf-ligne 13000 Self-employed com Commission du travail indipendent 012 013 016 020 Armuta Roolpient's name and address - Nom et adirecce du beneflolaire Last Mint-Nom de talent man Phinen Honoraires ou autres sommes pour service renda Intel-In 024 048 Other information (see page 2) Autres renseignements (voir la page 2) Bas-Case Amount - Montent Bex-Con Amount-Martin Box Case Amount - Montant Bex. Ca Amount-Mart Bos.com Amount - Montent Bex-Cese Amount - Montent Box Case Amount. Mortar Bex- Cine Amount - Montant Boca Amount - Montent Box.Co Amount Mantan Box Case Amount - Monta Amount - Montant Clear Data Report those amounts on your tax return. Box 016. Pension of superannuation - Enter the amount on line 11500. It may qualify for the perion income amountseaine 31400 in your las guide). See line 11500 and 13000 in your bax guide The amount in the following box is included in box 018 * Box 124 Vas bersalig ble for person i-See Form To Joint Election to Split Person Income Box 018 Lumpsum payments - Enter the amount on ne 18000 The amounts in the following bexim are included in box 018 . Box 102. Lumpsum payments -noident services transferred under peragraph 606 Bex 10. Lumpam payment from registered pension plan that you cannot Box 048 Fees for services - Report this amounts busier professional income Box 120 Tax deferred cooperative shere. This amount may be deleted. For more information Line Seos - Petronage dividence in Guide T4002 Self-employed Busine Profesional ilon, Farming and Fishing income Box 133, Variable pension bens-Seine 11500 in your tax guide Box 135, Recipient-paid premiums for private health services plans-Seine 33090 in your tax guide Box 19-Tuition assistance for adult basic education Il Canada Revenue T5 Statement of Investment Income Agence du revenu du Canada tat des revenus de placement Dividend from Cardin corporations-Dividendes de canadiennes Federal credit - Credits Actualmente dividende 2s Teclamount of eligible dividende 25 Dividend te dividende 7,000.00 9,860.00 1,450.93 Mortant de dividendes termins Montent importe de dividende Crdit d'imp pour videre Adhuc mount of dividende 11 Table meurt of dividende other than lide dividende 12 Dividend beredar darde nelig ble derde other than alle derde Clear Data Year Protected B / Protg B 2020 when completed / une fois rempli Annde 13 Interest from Canadian sources 18 Capital gains dividends 10 Interats de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type O 527000145 1 Code du feuillet Nundroidenticton du bondaire Type de bench Nutres de dividendes termini Creditmpt pour vidende warum die dividendes Series Montre de dividendes tres de dividendes de Other Information (see the back) Autres renseignements (gee verso) Box / Case Amount / Montant Box / Case Amount / Montant Box / Case Amount / Montant Recipients name (last name first and address - Nom, prnom et adresse du beneficiaire JAMES DOODE 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Payer's name and address-Nom et adresse du payeur GREAT BANK OF CANADA 456 BAY STREET TORONTO ONTARIO M5J 2J5 Currency and Identificaton codes Code de devise et dhdentication Foreign currency Transit-Succursale Devises etrangeres See the privacy notice on your retum/ Cornulevia de confians votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numero de compte du beneficiaire Canada Revenue Agence du revenu Agency du Canada T5 Statement of Investment Income tat des revenus de placement Dividend from Cardin corporations-Dividendes de canadiennes Federal credit - Credits Actal curt tigble dividende 2 Telemount of eligible dividende 28 Dividend te dividende Year Protected B / Protg B when completed / une fois rempli Annde 13 Interest from Canadian sources 18 Capital gains dividends Mortant rial can dividerla determinds Adhuc mount of dividende other than it dividende Montent Impoble de dividende Selemade Table rourt of dividende other than the Credit d'imp pour dividende 12 Dividend box credit for didende other than ble dividende Interits de source canadienne Dividendes sur gains en capital Report Code 22 Recipient identification number 23 Recipient type 10 11 Mantenimpose des dividendes Credit hp pour videre regur de dividendes em Code du feuillet Nundroidenticton du bondaire Type de reci Mare dividendes res que des dividendes de Other information see the back) Autres renseignements Isez le verso) Box Case Amount / Montant Box Case Amount / Mentant Box Case Amount / Montant Recipients name (last name frst) and address - Nom, prnom et adresse du bene claire Payer's name and address-Nom et adresse du payeur Currency and identification codes Codes de device et d'identification Foreign currency Transit-Succursale Devises etrangeres See the privacy notice on your retum/ Consultavia de confidentielle dans votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numero de compte du beneficiaire T5 Statement of Investment Income Canada Revenue Agence du revenu Agency du Canada tat des revenus de placement Divided from Cardin corporations-Dividendes de canadiennes Federal credit - Credits Actual amount of alle dividende 25 Telemount of ligbeddende 26 Dividend scredit tregole dividende Year Protected B / Protg B when completed / une fois rempli Annde 13 Interest from Canadian sources 18 Capital gains dividends Mortent des dividendes termini Actus est of dividende other than libe dividende Montent importe de dividende Table out of dividende other than lg ble sideda Crdit d'imp pour dividendesine 12 Dividend be credit for didende other than eligible dividende Interats de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type 10 11 Mantenimpa didende were dividende Credits pour vidende stregua de dividende minds Code du feuillet Nundroidenticton du bondaire Type de dcles Mortal de dividendes autre que es dividendes de Other Information see the back) Autres renseignements (sez le verso) Box Case Amount / Montant Box / Case Amount / Montant Box / Case Amount / Montant Recipients name (last name fret) and address - Nom prnom et adresse du beneficiaire Payer's name and address-Nom et adresse du payeur T5 Statement of Investment Income Canada Revenue Agence du revenu Agency du Canada tat des revenus de placement Dividends from Canadian corporations - Dividendes de societes canadiennes Federal credit - Credit federal 24 Actual amount of eligible dividends 25 Taxable amount of eligible dividends 26 Dividend tax credit for eligible dividends Clear Data Year Protected B / Protg B 2020 when completed / une fois rempli Anne 13 Interest from Canadian sources 18 Capital gains dividends 5,000.00 Intrts de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type O 527000145 2 Code du feuillet Numro d'identification du bnficiaire Type de bnficiaire Montant rel des dividendes determines Actual amount of dividends other than eligible dividends Montant imposable des dividendes determines Taxable amount of dividends other than eigble dividends Credit d'impt pour dividendes determines 12 Dividend tax credit for dividends other than eligible dividends 10 11 Credit d'impt pour dividendes autres que des dividendes determines Montant rel des dividendes Montant imposable des dividendes autres que des dividendes determines autres que des dividendes determines Other information (see the back) Autres renseignements (lisez le verso) Box / Case Amount / Montant Box / Case Amount / Montant Box / Case hount/Montant Recipient's name (last name first) and address - Nom, prnom et adresse du bnficiaire JAMES DOODE (50%) AND SUSAN BOND (50%) 123 MAIN STREET ANYTOWN, ONTARIO KOH 1HO Payer's name and address - Nom et adresse du payeur ANYTOWN BANK OF CANADA 456 MAIN STREET ANYTOWN ONTARIO | 1 29 Currency and identification codes 28 Codes de devise et d'identification Foreign currency Transit - Succursale Devises trangres See the privacy notice on your retum. Consultez l'avis de confidentialite dans votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numro de compte du bnficiaire Year Canada Revenue Agence du revenu Agency T5 Statement of Investment Income du Canada tat des revenus de placement Dividends from Canadian corporations - Dividendes de societes canadiennes Federal credit - Credit federal 24 Actual amount of eligible dividends 25 Taxable amount of eligible dividends 26 Dividend tax credit forligible dividends Protected B/ Protg B when completed / une fois rempli Capital gains dividends Anne 13 Interest from Canadian sources 18 Montant rel des dividendes determines Actual amount of dividends other than eligible dividends Montant imposable des dividendes determines Taxable amount of dividends other than elgible dividends Credit d'impot pour dividendes determines 12 Dividend tax credit for dividends other than ellgible dividends Intrts de source canadienne Dividendes sur gains en capital 21 Report Code 22 Recipient identification number 23 Recipient type 10 11 Credit dimpot pour dividendes autres que des dividendes determines Code du feuillet Numro d'identification du bnficiaire Type de bnficiaire Montant rel des dividendes Montant imposable des dividendes autres que des dividendes determines autres que des dividendes determines Other information (see the back) Autres renseignements lisez le verso) Box / Case Amount / Montant Box / Case Amount / Montant Box / Case Amount / Montant Recipient's name (last name first) and address - Nom, prnom et adresse du bnficiaire Payer's name and address - Nom et adresse du payeur Currency and identification codes Codes de devise et d'identification Foreign currency Transit-Succursale Devises trangres See the privacy notice on your return. Consultez l'avis de confidentialite dans votre dclaration T5 (19) For information, see the back. Pour obtenir des renseignements, lisez le verso. Recipient account Numro de compte du bnficiaire Canada Como Aconca dhuron Statamant of Instant Insama Year Protected B/Protg Clear Data VOID ANNUL 10 Report code 13 Year Anne 2020 Code du feuillet 0 Agence du revenu du Canada 11 Recipient type Type de bnficiaire 1 Foreign currency Devises trangres 12 Recipient identification number Numro d'identification du bnficiaire 527-000-145 Protected B / Protg B when completed / une fois rempil T5008 Statement of Securities Transactions Etat des oprations sur titre 14 Date MMDD-MMJJ 12-01 15 Type code of securities 18 Quantity of securities Code de genre de titres Quantit de titres SHS 2,000 17 Identification of securities Dsignation des titres SHARES OF GREAT BANK OF CANADA 18 ISIN/CUSIP number Numro ISIN/CUSIP 19 Face amount Valeur nominale 20 Cost or book value Cot ou valeur comptable 42.000.00 1+Canada Revenue Agency 21 Proceeds of disposition or settlement amount Produits de disposition ou paiements 144,000.00 22 Type code of securities received on settlement Code de genre de titres reus en guise de rglement 23 Quantity of securities received on settlement Quantit de titres reus en guise de reglement 24 Identification of securities received on settlement Dsignation des titres reus en guise de rglement Name and address of trader or dealer in securities Nom et adresse du ngociant ou du courtier en valeurs Last name (print) - Nom de famille (en lettres moules) First name and Initials - Prnom et Initiales DOODE, JAMES 123 MAIN STREET ANYTOWN ON KOH 1HO Recipient Bnficiaire ABC SECURITIES BROKER 1000 MAIN STREET ANYTOWN ON KOH 1HO See the privacy notice on your return. Consultez l'avis de confidentialite dans votre dclaration. T5008 (19) Year Anne VOID ANNULE 10 Report code Code du feuillet 11 Recipient type Type de bnficiaire 12 Recipient identification number Numro d'identification du bnficiaire 13 Foreign currency Devises trangres Agence du revenu du Canada Protected B / Protg B when completed / une fois rempil T5008 Statement of Securities Transactions Etat des oprations surtitres 14 Date MMDD-MMJJ 15 Type code of securities 18 Quantity of securities Code de genre de tres Quantit de titres 17 | Identification of securities Dsignation des titres Lanado Revenue 18 | ISIN/CUSIP number Numro ISIN /CUSIP 19 Face amount Valeur nominale 20 | Cost or book value Cot ou valeur comptable 21 Proceeds of disposition or settlement amount Produits de disposition ou paiements Agency 22 Type code of securities received on settlement Code de genre de titres reus en guise de rglement 23 Quantity of securities received on settlement Quantit de titres reus en guise de rglement 24 Identification of securities received on settlement Dsignation des titres reus en guise de rglement Last name (print) - Nom de famille (en lettres moules) First name and Initials - Prnom et Initiales Name and address of trader or dealer in securities Nom et adresse du ngociant ou du courtier en valeurs Recipient Bnficiaire See the privacy notice on your return. Consultez l'avis de confidentialite dans votre declaration. T5008 (19) INFORMATION TO USE FOR THE TAX RETURN CASE STUDY: James Doode decided to start his own business in 2019 after retiring from the Canadian Armed Forces. Upon retirement in 2018, James elected to receive immediate monthly pension payments from his former employer's pension plan. James' business consists of a motorcycle shop known as James' Specialty Bike Shop, selling and repairing motorcycles (in du stry code 441220). James proudly specializes in customizing motorcycles to very exclusive clients. James hired you to prepare his personal tax return for the year 2020, as well as for his common-law partner, Susan Bond. James and Susan want to pay the very least tax possible. They will use any election or choice legally available to them to achieve that objective. James'income is mainly from his pension and personal business, while Susan's income is mainly from her salary as bookkeeper for James' business. Attachedis an Appendix showing the relevant financial information pulled from the accounting records for James' business. The amounts shown have not been adjusted for tax purposes. James expects you to identify which items are allowed for tax purposes to comply with the tax laws in Canada. James and Susan have other in come from their investments and rental property. Below is the information needed to prepare their tax returns. Tax forms James and Susan received are included on the Case Study link as separate documents confirming the various items of income earned for the year. Detailed Information: James was born on November 1, 1970. He is divorced but currently lives with Susan Bond, his common-law partner, at 123 Main Street, Anytown, Ontario, KOH 1H0. Both have been living together for several years now. James' Social Insurance Number (SIN) is 527-000-145. Susan's SIN is 130-692-544. Susan was born on December 2, 1970 and has been blind since birth but still manages to work as a bookkeeper for James' business - see separate T4 slip attached issued to Susan for 2020 and financial information for James' business in the Appendix below. Susan also has income from joint investments with James - see further below During 2020, James received bi-weekly pension payments from his former employer's pension plan for a total pension income of $50,000 - see T4A slip attached issued to James for 2020 (box 16). Federal income tax of $8,000 was withheld at source on th at pension income- see box 22 of the T4A slip. James has spousal support obligations from his previous marriage. He is required to pay $1,000 per month to his former spouse (Mary Roode: SIN: 527- 000-129) in accordance with a court order. During the year 2020, James was only able to pay 3 months worth of support. James and Susan have no children but James' older brother Ricklives with them on a permanent basis since 2016 as he cannotlive on his own due to a permanent mental disability. Rick was born on June 10, 1966 and has $8,000 of social assistance income for 2020 under the Ontario Disability Support Program. His SIN is 527-000-947. Forms T2201 have already been filed with CRA in previous years for both Susan and Rick and their condition has not changed since. During 2020, James received $7,000 of eligible dividends on shares he owns of the Great Bank of Canada, a Canadian public company - see the T5 slip James received from the bank (box 24) for 2020. No income tax was with held on that dividend. James and Susan earned interest income for a total of $5,000 during 2020 from a joint investment account(co-owned 50% each)- see the T5 slip James and Susan received from the bank as Co-owners (box 13). No income tax was with held on that income. During the year 2020, James sold 2,000 shares of the Great Bank of Canada (a publicly traded company) that he had acquired over the last 10 years with an average cost of $21.00 per share. The shares were sold on June 1, 2020 at a price of $72.00 per share, on which a 1% commission was paid to a broker ($0.72 per share). Rental Activities James and Susan acquired jointly (50% each) a residential property during 2020 which they rentout to earn income. The property was acquired on February 1, 2020 and rented-out for a 1-year period to a youngfamily th at recently moved to the area for $3,500/month. Below is the information relating to that property for 2020, which is co-ownedin equal share by James and Susan (50% each): Address: 121 Main Street, Anytown, ON (co-owned by James and Susan equally. 50% each) Cost of property purchased: $395,000 of which $55,000 was for the land. Cost of additions made to the building in October 2020: $90,000 (addition of a garage). Due to this addition, it was agreed th at the rent for the home will increase to $4,000/month starting November 1, 2020. $36,000 Revenues Gross Rents Expenses Property taxes Insurance Interest on mortgage Mortgage principal Regular maintenance & repairs $3,200 1,100 6,300 1,525 3,000 In order to finance the purchase of the rental property, James and Susan solda cottage they also jointly owned (50% each) and used exclusively for their personal enjoyment, located at 123 Beach Lane, Anvlake, ON. They had purchased the cottage back in 2010 at a cost of $60,000. They sold the cottage on June 15, 2020 for $260,000 cash. All transaction costs were borne by the purchaser. James and Susan do not wantto design ate the cottage as their principal residence because they feel their current home has a much greater accrued gain and want to preserve the principal residence tax exemption for th at property instead. James also sold a boat he owned near the cottage. The boat had a cost of $35,000 and was sold for $15,000 on June 20, 2020. James contributed $22,000 into his own RRSP on September 1, 2020. James wants to deduct the maximum amount this year. His unused RRSP Deduction Room at the end of 2019 was $10,500 and his Earned Income for 2019 (business income) was $60,000. He had no Pension Adjustmentfor 2019. Susan also contributed $6,000 to her own RRSP on the same date. Her unused RRSP Deduction Room at the end of 2019 was $1,500 and her Earned Income for 2019 was $20,000. She had no Pension Adjustmentfor 2019. While talking with James, you discovered that as a former member of the Canadian Armed Forces he remains on call for high-risk search and rescue missions. During the year 2020, James worked 275 hours as a volunteer on search and rescue missions for which he did not receive any compensation. Finally, James paid the following medical expenses for the year 2020: Date Patient Nature expense June 1, 2020 James Chiropractor June 5, 2020 Susan Prescriptions Dec 20, 2020 Susan Prescriptions Every 2 months Rick Prescriptions ($600 ea.) TOTAL medical expenses for 2020 Amount $2,000 $ 900 $ 900 $3,600 $7,400 Finally, James paid federal income tax in stalments of $2,500 quarterly to the CRA throughout the year 2020, for a total of $10,000. APPENDIX Accounting Information for 2020 James' Specialty Bike Shop Revenues Motorcycle and Parts Sales $320,000 Expenses Purchase of inventory.parts and supplies (Note 1) Golf club dues (Note 2) Fines and penalties (Note 3) Insurance (Note 4) General office expenses Home Office expenses (Note 5) Salaries (Note 6) Employer contributions to CPP and El Depreciation (Note 7) Loss on sale of equipment(note 7) Truck expenses (Note 8) Total Expenses $110,000 5,000 7,500 5,000 3,000 3,012 58,000 3,960 45,650 8,250 5,700 $255,072 Note 1: The openinginventory on January 1, 2020 was $15,000. The closing inventory on December 31, 2020 was $35,000. Note 2: James joined the local golf club to find new customers. The membership cost was $5,000 for the year. Note 3: In 2019 the business was sued for selling branded motorcycle parts without proper authorization from the brand owner. In early 2020, James reached an out-of-court settlement with the brand owner which provides th at James will pay a penalty of $7,500 for pre-2020 transactions that were completed with out proper authorization, in exchange for the brand owner dropping the charges against him. The penalty was paid February 1, 2020. The agreement also provided th at James would enter into a new distributorship agreement with the brand owner effective January 1, 2020 - see Note 7 below for further details under "Intangible Assets". Note 4: The insurance expense includes the cost of the truck insurance of $2,000 - see Note 8 below. Note 5: Starting January 1, 2020, James moved the bookkeeping office from the shop to his home. A room representing 12% of the 1,000sq.m. home was set aside for the exclusive use of Susan's bookkeeping functions. The home has a cost of $500,000. Below are the costs for 2020 relating to the home office space: Home Insurance $1,500 Interest on mortgage $8,500 Property taxes $5,200 Home telephone line $800 Utilities $5,100 Maintenance and repairs $4,000 TOTAL $25,100 x 12% = $3,012 Note 6: There are 2 employees: one mechanic (George Dewlitle) and one bookkeeper (Susan Bond). George was paid a gross salary of $33,000 for 2020 while Susan was paid a gross salary of $25,000 for 2020. The T4 slip for Susan is included as a separate pdf document to this case study for your information, confirming the CPP contributions ($1,128.75-box 16). El premiums ($395.00 - box 18) and Federal Income tax ($5,000.00 - box 22) with held at source on her salary for 2020 Note 7: The following is the information relating to the fixed assets of the business Building: The building is 3,000 sq.m. located at 124 Main Street, Anytown, ON. A third (1/3) of the surface is used as a showroom for the customised motorcycles. The rest of the building (2/3) is used as a shop for mechanic and customization work. The building was constructed on March 1, 2019 at a cost of $195,000. The UCC for tax purposes (class 1) at the beginning of 2020 was $189,150. Truck: The truck is a Ford F150 extended cab pick-up th at James uses for both business and person al purposes-see Note 8 for operating costs. The truck was purchased on June 1, 2019 at a cost of $55,000. For tax purposes, maximum CCA was deducted in 2019 le nga UCC balance on January 1, 2020 of $25,500 Other Tangible Assets: The following details relate to the other fixed assets used in the business: CCA UCC Balance Description class Jan 1, 2020 Customizing tools and equipment class 53 $9,000 Computer-assisted design equipment class 12 $7,500 Computer class 50 $2,538 Class 53 Customizing tools were acquired on March 1, 2019 at a total cost of $12,000. For tax purposes, maximum CCA was deducted in 2019 leaving a UCC balance on January 1, 2020 of $9,000. Addition al new equipment was acquired on December 1, 2020 at a cost $45,000. Class 12 Computer-assisted design (CAD) equipmentwas acquired on March 1, 2019 at a cost of $15,000. For tax purposes, maximum CCA was deducted in 2019 leaving a UCC balance on January 1, 2020 of $7,500. During 2020, James decided to replace the CAD equipment because it was not performingwell enough for the demands of his growing business. A new more powerful CAD equipmentwas purchased on March 1, 2020 at a cost of $55,000. The vendor of the new equipment accepted to take the old equipmentin exchange. A trade allowance of $3,000 was received for the old equipment. The net book value for accounting purposes was $11,250 resulting in a loss of $8,250 included in the total expenses for accounting purposes for the year. Class 50 Computer hardware was acquired on March 15, 2019 at a total cost of $3,500. For tax purposes, maximum CCA was deducted in 2019 leaving a UCC balance on January 1, 2020 of $2,538. No further additions were made in 2020. Intangible Assets: On January 15, 2020, James signed a new 25-year distributorship agreement with the owner of a well-known motorcycle brand. James paid $100,000 to obtain the 25-year license, which is effective January 1, 2020 Note 8: James has a truck th at heuses for both business and personal purposes. Total distance driven for the year was 29,500km of which 90% were for business (26,550km). Total truck expenses for 2020 paid by the business were as follows (included in the financial information above): Insurance $2,000 Fuel $3,200 Maintenance $2,500