Reference no: EM132600856

Question - Andrew Brock operates an unincorporated business which, in most years, has been very successful, producing a net business income of more than $200,000 per year. However, in 2019, due to some very bad inventory decisions, his gross revenues are only $125,000 which result in net business income for tax purposes of $24,000. Andrew has no other source of income during 2019.

During a slack period of business activity, Andrew enrolled in an organizational behaviour course at a local university. The course lasted 7 weeks and required a minimum of 12 hours of work each week.

His wife, Andrea Brock is an accountant for a large publicly traded company. For 2019, her Taxable Income includes the following amounts:

Gross Salary $ 92,300

Registered Pension Plan Contributions ( 4,000)

Fees For Preparing Tax Returns For Friends And Family 12,700

Stock Option Benefit 4,100

Taxable Capital Gains 8,500

Interest Income 7,200

Taxable Income $120,800

In January of 2019, as the result of a serious snowboarding accident, Andrea was hospitalized for a period of one week. Subsequent to her release, she was in a wheel chair for an additional 6 weeks. A doctor has certified that, during this 7 week period, Andrea was not capable of caring for her children.

During 2019, the couple incurred actual child costs of $350 per week for 50 weeks. During the remaining two weeks of the year, the couple arranged their schedules so that they could provide their own child care.

Required - Determine the maximum amount that can be deducted by Mr. and Mrs. Brock for the year ending December 31, 2019 for child care expenses under the following assumptions:

They have two children, neither of whom qualify for the disability tax credit. The children are 2 and 12 years old.