Reference no: EM132546548 , Length: 2 pages
Tax Software Assignment
Mr. John Boxing (SIN 527-000-061) was born in Vancouver on August 28, 1951. He has spent most of his working life as a pianist and song writer. He and his family live at 111 WWW Street, Vancouver, B.C. V4H 3W4, phone (604) 111-1111. He is not registered for CRA online mail and does not wish to have an electronic notice of assessment.
Mr. Boxing 's wife, Natasha (SIN 527-000-129), was born on June 6, 1973. She and Mr. Boxing have three children. Lisa was born on June 6, 2014 and Leon was born on July 7, 2019.
Sarah was born on September 2,1998 and is in full time attendance at university for all of 2019 (including a four-month summer session).
Her tuition is $8,200 and she requires textbooks which cost $750. These amounts are paid by Mr. Boxing. Sarah has no income during the year and has agreed that the maximum tuition amount should be transferred to John.
Natasha's income during 2019 is $320,000 from singing engagements. Other information concerning Mr. Boxing and his family for 2019 is as follows:
Part 1. Mr. Boxing earned $16,500 for work as the house pianist at the Loose Moose Pub. His T4 showed that his employer withheld $500 for income taxes $663 for CPP and $267.30 for EI.
Part 2. During the year, Mr. Boxing made his annual $2,200 donation to YESS, a registered Canadian charity.
Part 3. Mr. Boxing wishes to claim all his medical expenses on a calendar year basis. On December 2, 2019, Mr. Boxing paid dental expenses to Canada Wide Dental Clinics for the following individuals:
|
Himself
|
$1,400
|
|
Natasha (wife)
|
900
|
|
Sarah (daughter)
|
300
|
|
Lisa (daughter)
|
1,100
|
|
Leon (son)
|
150
|
Part 4. Mr. Boxing receives $7,217.40 in Old Age Security payments and $3,500 in Canada Pension Plan "retirement benefit" payments over 12 months. There was no tax shown as withheld on his T4A(OAS) or his T4A(P).
Part 5. Mr. Boxing builds a state-of-the-art home theatre in a new extension of his home. In order to finance it, he sells stock in his RRSP and withdraws the funds from his RRSP. His T4RSP showed $22,000 in withdrawals from the House of Rock Bank (Box 22) and total tax of $5,600 deducted from these payments.
Part 6. Several of Mr. Boxing 's songs, including his outstanding hit, "Drop Kick Me Jesus Through the Goal Posts of Life", have provided him with substantial royalty payments over the years. In 2019, his revenue was $88,000 in royalty payments from the Never Say Die Record Company as well as $16,000 from selling a song to a company representing a major Canadian pop singer. He does not collect GST on this professional income.
Part 7. On January 1, 2019 he began renting a small, quiet studio for $1,000 a month and purchased a Roland electric piano on January 15th for $12,350 that was delivered there. This space is used solely for his composing and song writing business.
Part 8. Mr. Boxing made contributions to the Federal Liberal Party in the amount of $400 during the year.
Part 9. Mr. Boxing made a $5,000 contribution to his TFSA during the year. Thanks to the excellent investing advice of his gardener, the balance in his TFSA account has grown to more than $175,000 by the end of the year.
Part 10. At the beginning of 2017, Mr. Boxing had a net-capital loss carry forward of $22,000 from the sale of shares in 2016. He had not disposed of any capital asset prior to 2016. Below are the assets he disposed of in 2019:
|
Asset Dispositions
|
Asset 1
|
Asset 2
|
Asset 3
|
|
Description
|
Athletic Co. Shares.
|
National Oil Shares
|
Sailboat
|
|
Number of units
|
154
|
140
|
N/A
|
|
Year of acquisiton
|
2012
|
2014
|
2015
|
|
Date of disposition
|
10-Jan
|
20-Apr
|
30-May
|
|
Proceeds of disposition
|
33,900
|
7,500
|
63,800
|
|
Adjusted cost base
|
27,300
|
10,300
|
59,800
|
|
Outlays and expenses
|
339
|
38
|
N/A
|
|
Asset Dispositions
|
Asset 4
|
Asset 5
|
Asset 6
|
|
Description
|
Vintage Car
|
Stamps
|
Sculpture
|
|
Year of acquisiton
|
2017
|
2010
|
2014
|
|
Date of disposition
|
4-Jul
|
13-Aug
|
12-Oct
|
|
Proceeds of disposition
|
7,000
|
1,100
|
600
|
|
Adjusted cost base
|
10,100
|
800
|
1,500
|
|
Outlays and expenses
|
N/A
|
N/A
|
N/A
|
Part 11. Mr. Boxing provides you with the following receipts for child related expenses.
|
Child
|
Child related expenses
(organization or Name and SIN)
|
No. of
weeks
|
Amount
|
|
Lisa Boxing
|
YMCA Edmonton (before/after school care)
|
|
2,390
|
|
Leon Boxing
|
ABC Daycare
|
|
11,950
|
|
Lisa Boxing
|
Camp Calway
|
2
|
1,350
|
|
Lisa Boxing
|
Hip Hop Dance Classes
|
8
|
735
|
Part 12. Mr. Boxing paid instalments of $6,000 each for 2019, as requested on his Instalment Reminders from the CRA. He paid these instalments on March 15, June 15, Sept 15 and Dec 15th.
Required: With the objective of minimizing Mr. Boxing 's Tax Payable, prepare Mr. Boxing 's 2019 income tax return using the ProFile tax software program assuming Natasha does not file a tax return.