Reference no: EM132923106
ASSIGNMENT
LARRY AND LINDA SMITH ARE MARRIED AND LIVE WITH ALL OF THEIR CHILDREN. THEY HAVE ASKED YOU TO PREPARE THEIR INCOME TAX RETURNS 2020
ON CANTAX (NOT THEIR CHILDREN'S)
LARRY: SIN # (ANY).; BIRTH: DECEMBER 15, 1964. (Insert your name) LINDA: SIN # (ANY): BIRTH: JANUARY 12, 1966. (Insert your name)
NOTE: (USE ANY ADDRESS AND ANY OTHER PERSONAL INFORMATION REQUIRED!! THANKS) CHILDREN:
MARY-BIRTH: MAY 11, 2007; NET INCOME: $0; DISABLED: HEARING LOSS;
MIKE -BIRTH: OCTOBER 12, 1999; NET INCOME/Taxable Income: $15,000; FULL-TIME (8 MONTHS) COLLEGE STUDENT: TUITION: $10,000 PAID BY PARENTS.
Larry worked 500 Hours this year as a Volunteer Fire Fighter. (Volunteer Fire Fighter Credit) The parents also paid $50,000 in Adoption Fees to officially adopt Mary, this year.
LARRY AND LINDA 'S INVESTMENT INCOME- (Line 12000 and 12100)
TD BANK INTEREST $1,000 (Larry)
CANADA SAVING BONDS INTEREST $500 (Linda)
SCOTIA BANK ELIGIBLE DIVIDEND RECEIVED IN CASH: $1,000 (Larry)
RENTAL INCOME: (LINDA) (Line 12600)
(20% of Building is used for personal use)
COMMERCIAL BUILDING CLASS 1, UCC (JAN 1, 2020): $200,000 (net of 20% personal use)
FURNITURE CLASS 8: UCC (JAN 1, 2020): $10,000; PURCHASE: COST $20,000; DISPOSAL: ORIGINAL COST: $5,000; PROCEEDS: $20,000. Hint: Capital Gain, L127
GROSS RENT - $90,000
MAINTENANCE EXPENSE - $40,000 (non capital, and deductible) MORTGAGE INTEREST - $2,000
PROPERTY TAX - $3,000
STOCKS AND OTHER CAPITAL GAINS: (LARRY) (Line 12700)
SOLD HIS LPP-Painting FOR $8,000 WHICH COST HIM $200 TO PURCHASE SOLD XYZ SHARES - COST $30,000; PROCEEDS $50,000
PRIOR YEARS' UNUSED ALLOWABLE CAPITAL LOSSES $10,000 (2005) (Hint: use Line 25300) INVESTMENT INTEREST EXPENSE - $2,500; (Line 22100, Schedule 4)
PROFESSIONAL CONSULTING BUSINESS (LARRY) (Use Line 13700 Professional)
REVENUE $40,000;
OFFICE SUPPLY EXPENSES $5,000; CPA PROFESSIONAL FEES- $500
Home Office Expenses: (100M2 of 1,000M2 of home; Utilities was $1,000; Insurance was $2,000; Property tax was $3,000)
AUTO: TOTAL KM DRIVEN IN 2020-20,000, BUSINESS-20%
total expenses: gas($5,000); Insurance ($1,200);Maintenance($4,000) Auto cost (Ucc-$20,000, claim maximum)
PRIOR YEARS' UNUSED BUSINESS LOSSES $20,000 (2018) (Hint: Use Line 25200)
EMPLOYMENT INCOME-LARRY (XYZ Co.) SALARY-$90,000
Deductions:
EI - Maximum for this year. (Look up for 2020) CPP - Maximum for this year. (Look up for 2020) INCOME TAX - $30,000
RPP - $3,000
LARRY CONTRIBUTED $5,000 TO HIS WIFE'S SPOUSAL RRSP (2020). LARRY'S Last Year's EARNED INCOME = $20,000. NO PENSION ADJUSMENT.
EMPLOYMENT INCOME - LINDA (Indiana Corp) GROSS-$40,000
Deductions:
EI - $589 CPP - $1,559 RPP-$1,000
INCOME TAX - $12,000
LINDA CONTRIBUTED THE MAXIMUM ALLOWED TO HER OWN RRSP (2020).
LINDA'S Last Year's EARNED INCOME = $50,000; PENSION ADJJUSTMENT. (Last Year) =$2,000.
CONTRIBUTIONS :( LARRY AND LINDA)
Charities: UNITED WAY - $1,500; Hospital of Sick Kids - $7,000 QUALIFIED FEDERAL POLITICAL PARTY DONATION- $4,000
QUALIFIED MEDICAL EXPENSES - $10,000 (LINDA)
CHILD CARE EXPENSE (2020) - $5,000 (NANNY) USE ANY NAME AND ADDRESS.
REQUIRED: Using Cantax T1-Current Calculate the Couples "MINIMUM" INCOME TAX PAYABLE for Larry and Linda
Attachment:- CANTAX.rar