c) When it comes to RRSP and TFSA, Kevins father, George has simply transferred the amounts to both plans based on what his tax advisor recommends. George has always contributed the maximum to both his RRSP and TFSA on January 1^st each year, but without quite understanding how either the RRSP or TFSA work. He has therefore asked Kevin to work out a few scenarios for him to help him better understand. (2.5 marks)

George: (currently 41 years old, birthday is June 23rd):

• graduated in April 2000 and met Kevins mother at their graduation ceremony, they married a year later; and
• started his own business upon graduation and always paid himself a salary of $300,000 each year for the last 22 years.

Scenario 3

If George over contributes to his TFSA (i.e. more than the contribution room limit), what will be the penalty? (.5 marks)

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Scenario 4:

If George over contributes to his RRSP (i.e. more than the contribution room limit) by $2,000, what will be the penalty? (.5 marks)

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Scenario 6:

Consider Georges example in Scenario 5, but this time, instead of his TFSA growing to $400,000, he loses all the money as the company goes bankrupt in November 2022. How much would his contribution room then be for 2022? 2023? (.5 marks-.25 marks each)

2022: $____________ (.25 marks each)

2023: $____________ (.25 marks each)