CANTAX ASSIGNMENT
Evaluate Tax summary showing both spouses (one page).
1. Jerry's Business income schedule-T2125 And
2. Barbara's Rental income schedule-T776?
Jerry and barbara green are married and live with all of their children. They have asked you to prepare their income tax returns 2016 On Cantax (not their children's)
Jerry: sin #(any). ; Birth: December 15, 1963. (Insert your name)
Barbara: sin #(any): birth: January 12, 1965. (Insert your name)
Note: (Use any address and any other personal information required!! Thanks)
Children:
Karen-birth: May 11, 1999; net income: $0; disabled: hearing loss;
Kevin -birth: October 12, 1990; net income: $15,000; full-time (8 months) college student: tuition: $10,000 paid by parents.
The parents pay an annual fee of $1,000 to the arts school for karen. (arts credit). The parents also paid $30,000 in adoption fees to officially adopt karen, this year.
Jerry and barbara's investment income- (line 120 and 121) -
Td bank interest $1,000 (jerry)
Canada saving bonds interest $500 (barbara)
Scotia bank eligible dividend received in cash: $2,000 (jerry)
Rental income: (barbara) (line 126) -
(20% of building is used for personal use)
Commercial building class 1, UCC (Jan 1, 2016): $200,000 (net of 20% personal use)
Furniture class 8: UCC (Jan 1, 2016): $10,000; purchase: cost $20,000; disposal: original cost: $5.000; proceeds: $20.000. Hint capital gain??
Gross rent - $200,000
Maintenance expense - $40,000 (non capital, and deductible)
mortgage interest - $2,000
Property tax - $3,000
Stocks and other capital gains: (jerry) (line 127) -
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 $5,000 (2005) (hint use line 253)
Investment interest expense - $2,500;. (Line 221, schedule 4)
Professional consulting business (jerry) (use line 137 professional) -
Revenue $20,000;
Office supply expenses $5,000;
CPA professional fees- $500
Home office expenses: (100m2 of 1,000m2 of home; heat and electricity was $1,000; insurance was $2,000; property tax was $3,000)
Prior years' unused business losses $30,000 (2007) (hint: use line 252)
Auto: total km driven in 2016-20,000, business-20%
Total expenses: gas ($5,000); insurance ($1,200), maintenance ($4,000)
Auto cost (UCC-$36.000 claim maximum)
Employment income-jerry (xyz co.) -
Salary-$100,000
Deductions:
EI - maximum for this year.
CPP - maximum for this year.
Income tax - $35,000
RPP - $3,000
This year's company car benefit: available 12 mths; auto cost $20,000 including taxes.
Business km% - 80% total km driven during 2016: 50,000 km. (Provide excel spreadsheet showing Calculations); to be added to box 14 employment income.
Jerry contributed $5,000 to his wife's spousal RRSP (2016).
Jerry's last year's earned income = $20,000. No pension adjustment.
Employment income - Barbara (scott bank) -
Gross-$35,000
Deductions:
EI - $603
CPP - $1,550
RPP - $1,000
Income tax - $12,000
Barbara contributed the maximum allowed to her own RRSP (2016).
Barbara's last tears lamed income = $50,000; pension adjustment. (Last year) -$2,000.
Public transit pass cost $750.00 (paid by Barbara)
Contributions: (Jerry and Barbara)
Charities: united way - $2,500; hospital of sick kids - $5,000
Qualified federal political party donation- $1,000
Qualified medical expenses - $10,000 (Barbara)
Child care expense (2016) - $20,000 (nanny) use any name and address.