Question

Mr. William Norris is 45 years old. The following five independent Cases make varying assumptions for the 2016 taxation year with respect to Mr. Norris’ marital status and number of dependants. In all Cases, Mr. Norris earned employment income of $60,000 and his employer withheld the required EI premiums and CPP contributions.

Case A Mr. Norris is married and his wife, Susan, has Net Income For Tax Purposes of $8,800. Susan’s 73 year old mother, Bernice, lives with them. Bernice, an avid skier, had Net Income For Tax Purposes of $16,000 for the year.

Case B Mr. Norris is married and his wife, Susan, has Net Income For Tax Purposes of $4,410. They have one child, Martha, who is 10 years of age. Martha had no income during the year. During the year, the family had medical expenses as follows:

William              $1,200

Susan              1,600

Martha              350

Total              $3,150

Case C Mr. Norris is married and his wife, Susan, has Net Income For Tax Purposes of $4,500. They have a son, Allen, who is 19 years old and lives at home. He attends university on a full time basis during 8 months of the year. Mr. Norris pays $9,000 for Allen’s tuition and $900 for required textbooks. Allen had employment income during the summer months of $2,200. He will transfer any unused credits to his father.

Case D Mr. Norris is not married and has no dependants. On receipt of a $300,000 inheritance in December, he donates $50,000 to his local hospital, a registered charity. He chooses to claim $15,000 in 2016. As he has donated to this hospital on a regular basis, he is not eligible for the first-time donor’s super credit. He also makes contributions to a federal political party in the amount of $1,000.

Case E Mr. Norris is a single father. He has a daughter, Mary, who is 8 years old and lives with him. During the year, Mr. Norris received $360 in Universal Child Care Benefits. He elected to include these in the Net Income For Tax Purposes of Mary, who had no other income for the year. Two years ago, Mr. Norris graduated from a Canadian university. He currently has a Canada Student Loan outstanding. Mr. Norris pays back this loan in monthly instalments of $300. During the year, he paid $450 in interest on this loan.

Required: In each Case, calculate Mr. Norris’ minimum federal Tax Payable for 2020. Indicate any carry forwards available to him and his dependants and the carry forward provisions. Ignore any tax amounts that Mr. Norris might have had withheld or paid in instalments.

Answer 1

Care A sama pencalon % .op 9 8800 16000 94300 4. 400 Income from Employment Income from wife (clubbed) come from Relative mother in dow) Gros Income Standou Deduction 11995 upto 19950 1090 Mert 2aise 484800 to 1242 4632 Nct total income Standard Deduction 412,400 $24.800 des Income from Employment & 60,000 Income of inheritance ( Notar in care of Inhertone) - Gross income 4.60,00 des Deduction medical Expenses 415000 0.16 Political Party $ 60,000 Net income Tax liability Upto 19750 10010 Next 40 250 @ 12000 Net total income. 144.000 - $1975 $4830 $. 6.805 Case B up to 9875 1000 - 987.50 Next 30250 e 12010 - 3630.00 Next 38750 220/0 - 852.50 95470 Income from Employment - Income from susan (wife) = Grow income der Standard Deduction Net total income $ 60,000 8 4410 + 6ЧЧlo $24800 $39,610 Care E $1925 $ 2383 Upto 19750 10000 - Next 19860 @ 12000 Tor liability $4358 Income from Employment a $ 60,000 Income of child (clubbed) = 8360 Grors total income & 60360 dees' Standard Doduction. 24900 $35560 upto 19750 1001011975 Next 15810 @ 12% -8 1894 93872 As, Standard Deduction is higher in Case A, B, e. so it is taken. Income from come of income of Employment susan (wife) Son Como & 4500 $2200 866 Too Note