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.