90.2K

Verified Solution

Link Copied!

For the past 5 years, Mr. Brooks has been self employed as a consultant who contracts out to large Canadian public firms located in Winnipeg. In 2022, his business income amounted to $63,000. He also held investments in publicly traded corporations. He earned a total of $10,000 of eligible dividends in 2022. He sold some shares in his portfolio for $1,500, he bought them back in '08 for $1,000. Mr. Brooks used to work as an employee previously and has accumulated an unused RRSP carryforward room of $45,000.

 

In 2022, Mr. Brooks' had the following transactions:

 

       Federal Income Tax Installment                                                          $3,000

       RRSP Contributions                                                                               2,800

       Donations to a registered charity                                                             480

 

Other Information:

 

1. Mr. Brooks is married and his wife earns income of $7,500. He has an 8 year old son, Harold. Harold has no net income for the year. He also has a daughter, Julia, who went to McGill for a business degree. She is willing to transfer her tuition tax credit to her father. Julia works part time and earned $6,000 in 2022. Mr. Brooks paid a total of $7,500 of tuition fees for 2022.

 

2. Mr. Books has an allowable capital loss carryforward amount of $26,500. He has been taking a lot of losses on his investments, but, he is determined that it only takes one good investment to make it all back.

 

3. Mr. Brooks' mother, Grace, lives with Mr. Brooks due to a physical disability. Grace is 67 years old and her net income is $12,500. Grace refused to take any payments for caring for Harold as she received a large inheritance in the previous year. As a result, Mr. Brooks did not pay any child care or attendant costs for Harold.

 

4. Mr. Brooks paid the following eligible medical costs:

 

For Himself                                                                           $ 9,300

For Harold                                                                               2,450

For Grace                                                                                 1,265

Total                                                                                     $13,015

 

 

5. Mr. Brooks' purchased his first qualifying home in 2022 that he and his family have began and will continue to live in.

 

Required: Calculate, Mr. Brooks' 2022 net income, taxable income and federal income tax payable or refund.

Answer & Explanation Solved by verified expert

See Answer