Tax 1 | Accounting homework help

 

Mr. Norman formally separated from his wife early in 2019. Custody of his three children, aged 18, 12 and 7 was given to him as part of an agreement worked out with his wife in family court. To make a fresh start, effective March 31, 2019 he resigned his job in Toronto and took a position in Ottawa, about 400 kilometers away. He has come to you for help with the tax return, having correctly calculated his income under Subdivision a, b, and c of Division B as follows: Subdivision aSalary (from both employers in 2019) $75000Taxable group term life insurance premium paid by both employers 550RPP – both employers (5100) $70450Subdivision bBusiness income $8500Property income:Net rental loss from apartment building (4500)Grossed-up dividends from taxable Canadian public corporation 1250Canada savings bond interest 600Interest on loan to buy shares (250) $5600Subdivision cTaxable capital gains Sale of shares $6000Sale of cottage 5000Sale of painting 500 $11500Total $87550Additional information(1) He had the following additional income during 2019:A-lump-sum payment out of he RPP of his former employer who had made vested $10000contributions transferred directly to his RRSP Retiring allowance from previous employer 20000(2) He made the following payments in 2019:RRSP contribution for 2019 (assume earned income in 2018 was the same as for 2019 and his pension adjustment for 2018 was $5000) 10000Legal fees: - Representation in family court $4500- Appealing a tax assessment, which he lost 1250 5750Charitable donation (consistent with prior year) 1250Maintenance payments for wife by virtue of agreement - Total of monthly payment for her maintenance 8000- Total of monthly payments directly to owner of her apartment 5000 13000$30000(3) Mr. Norman had net capital losses of $11466 in 2015, which he has not used(4) He has never had a capital gain or loss before, nor has he ever claimed any of capital gains exemption (5) He paid the following expenses for his children in 2019• food and clothing $ 6,500• babysitter for half days during 30 weeks of school term ($110 per week) 3,300• babysitter for full days during 15 weeks of summer and other vacations ($105 per week) 1,575$ 11,375(6) Move to Ottawa —unsuccessful trip to find accommodation• car expenses $ 50• hotel for two nights ($150 per night) 300• meals for three days ($30 per day) 90
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