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During 2019, Mr. Robert Sparks had the following amounts of income and deductions on his tax return: Net employment income - $ 85,000 Income (Loss) from business - 16,000 Interest income - 6,000 Taxable capital gai

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Answer #1

Mr. Robert Sparks earned income would be calculated as follows:

Net employment income = $85,000

Add back RPP contributions = $1,000

Income (Loss) from business = $16,000

2019 Earned Income = $85,000 + $1,000 + $16,000 = $102,000

Given this, his maximum deductible RRP is calculated as follows:

Unused deductions room carried forward from 2019 = Nil

Annual addition:- Lesser of:

  • 2020 RRSP dollar limit = 27,230
  • 18% of 2019 earned income of $102,000 = $18,360

Less: 2019 PA ($1,000 + $1,500) = ($2,500)

Maximum deductible RRSP contribution = $18,360 - $2,500 = $15,860

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During 2019, Mr. Robert Sparks had the following amounts of income and deductions on his tax return: Net employment income - $ 85,000 Income (Loss) from business - 16,000 Interest income - 6,000 Taxable capital gai
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