Charles And Charlene Case Study - Taxation Assignment Help

Assignment Task :

Assignment Problem Nine - 12 (Comprehensive Case Covering Chapters 1 to 9) Family Information Spencer James is 41 years old. He has been married to Suzanne James for over 20 years. The couple have three children. All members of the family are in good health. Information on the children is as follows: 

Charles And Charlene are 8 year old twins. During 2020, each of the twins received eligible dividends of $1,000 on public company shares that were gifted to them by their father in July 2019. At the time of the gift, each block of shares had a fair market value of $9,500. Spencer had acquired the two blocks of shares at a cost of $8,000 each. In December 2020, each twin sold the shares for $10,000. Charlton is 19 years old and attended university on a full time basis for four months of the year. Spencer and Suzanne pay his tuition fees of $6,300, along with textbook costs of $650. He has agreed to transfer the maximum amount of his tuition credit to his father. Charlton lives with Spencer and Suzanne. His only income for the year is from the sale of shares purchased from Spencer as described in the following text. 

In June 2020, Spencer sells shares with an adjusted cost base of $28,000 and a fair market value of $36,500 to his son, Charlton. In order to provide Charlton with money to buy a car and to create a capital loss for himself, he sells the shares to Charlton for $5,000. Charlton sells the shares in September for $42,000. Because of their work demands, Spencer and Suzanne have child care costs for the two twins of $250 per week for 48 weeks. During the remaining four weeks, the twins are sent to summer camp at a cost of $250 per child per week. 

Suzanne's Income Information Suzanne operates a mail order business out of rented space. As it is furnished business space, the business does not own any capital assets. For 2020, her net business income, calculated on the basis of tax rules, was $70,544. During 2020, Suzanne spent six consecutive weeks attending a specialized business accounting program at a designated educational institution. She received a tuition tax receipt that stated she had paid $2,000 in tuition fees. In January 2019, Spencer gifted Suzanne a residential rental property. This property had cost Spencer $500,000 several years ago, with $100,000 of this amount allocated to the land and $400,000 allocated to the building. At the time of the gift, an appraisal indicates that the fair market value of the property was $530,000, allocated $110,000 to the land and $420,000 to the building. The building had a January 1, 2019, UCC of $376,320. Spencer did not recognize this transaction in his 2019 tax return. For the year ending December 31, 2019, Suzanne had net rental income, after the deduction of maximum CCA, of $16,400. In November 2020, after experiencing significant difficulties with tenants, Suzanne lists the property for sale. It sells within a month for $555,000, with $120,000 of this total allocated to the land and $435,000 allocated to the building. The net rental income, prior to the deduction of CCA, was $15,300 for 2020. 

Required:

A Determine Suzanne's federal Tax Payable and her CPP liability for 2020. In calculating Suzanne's federal Tax Payable, assume that Spencer's Taxable income exceeds $200,000.

B. Determine Spencer's federal Tax Payable for 2020. In determining these amounts, ignore GST, PST, and HST considerations.

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