Reference no: EM131853983

Jane Doe is 47 years old. She has been married to Clair for twenty-five years. The couple have four children Rosa, Robin, Roger, and Ruth, ages 8, 16, 19, and 21. Clair suffered serious health issues throughout 2015 and 2016 and was unable to work during this time. Since Clair is self-employed, he did not qualify for any sick benefits, thus, he had no taxable income in 2016. Due to his illness, Clair was hospitalized for four months during 2016. Rosa had to attend an after school program throughout all of 2016 since Jane was working and Clair’s health was too poor to look after her. The older siblings could not care for her either as they were busy with their own lives. Robin was very active in sports, Roger was away at university, and Ruth moved to Toronto to chase her acting dreams. Rosa’s after school program cost $3,600 in 2016. Jane had inherited a large piece of water-front property with a small cottage on it and $50,000 cash from her late grandparents ten years earlier. Her only sibling, Laura, inherited her grandparent’s residence, farm land, and $50,000 cash as well. Jane and Clair had always dreamed of building a new cottage on a piece of the property further down on the river. Clair’s health finally improved in late 2016 and they decided not to wait any longer. In order to help finance the cost of the new cottage they decided to sell the small cottage and the piece of land it was on to family friends for $250,000. The land had a fair market value of $50,000 and the rest of the value of the proceeds related to the cottage. The tax cost of the land and building when Jane inherited it was $10,000 and $140,000, respectively. The cottage did not qualify as a principal residence for any of those years. Since the purchasers were family friends, Jane agreed to let them pay $100,000 in 2016 and $50,000 in each subsequent year, 2017, 2018 and 2019, until the purchase price was paid in full. She did not charge her friends any interest on the outstanding balance. Jane loves to dabble in the stock market. She invested her entire inheritance of $50,000 in the stock market. Jane received no interest or dividends on her investments in 2016, only significant capital growth. One of her largest holdings is in ABC Ltd. At the start of 2016, she owned 3,000 shares of ABC Ltd. that had an average cost of $12.50 per share. She made the following purchase throughout the year: February 1st – 500 shares for $6,375 July 1st – 500 shares for $6,425 On September 1st, 2016, Jane sold 2,000 ABC Lt. shares for $9.90 per share (fair market value) to pay for Roger’s university tuition and text books, and to help support Ruth while she chases her dreams in Toronto. Jane has capital-loss carry-forwards of $7,000 available. Roger attended university on a full-time basis. He resided on campus during the academic year and lived at home during the summer. Roger had Net Income For Tax Purposes of $5,650 for 2016. His tuition expense for the eight months he was full-time at university was $12,000. Roger did not need to use any of his tuition credits to reduce his taxable income in 2016. The Dow’s incurred a substantial amount of medical expenses in 2016, primarily due to Clair’s illness, which Jane paid for. While her new employer provides her with a medical plan, her previous employer could not afford to do that. The medical costs Jane incurred and paid for in 2017 were as follows: Jane Prescriptions $ 475 Massage therapy 1,200 Chiropractor 2,200 Dental fees for check ups and cleanings 375 Clair Prescriptions 6,025 Glasses 600 Wheelchair (required for six months) 4,300 Nursing care 8,750 Robin Glasses 700 Dental fees for check ups, cleanings and repair 690 Prescriptions 295 Roger Prescriptions 1,250 Dental fees for check ups and cleanings 250 Doctor's fees for treatment for depression 1,400 Ruth Prescriptions 1,750 Dental fees for check ups, cleanings and repair 950 Massage therapy 600 Surgery to improve the way her nose looked 4,900 Jane has a huge soft spot for animals. In 2016, she donated her entire $5,000 housing loss reimbursement to the World Wildlife Fund (WWF), a well-known charitable organization that protects wildlife and their habitats. Of the income tax amounts withheld from Jane’s salary, $6,135 was withheld to pay for Provincial Taxes Payable for 2016. Jane’s net employment income in 2016 equals $45,314. Required: Calculate Jane’s 2016 Net Income For Tax Purposes, Taxable Income, Taxes Payable (Federal only) and Net Tax Owing or Recoverable (Federal only).