ACCT226 Chapter 4 Exam Exercise #2 PDF

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Exam Exercise Chapter Four - Canada Caregiver Tax CreditElaine Markham lives with her husband and 11-year-old daughter. Her husband’s income is less than the basic personal tax credit amount. Her 81-year-old mother also lives with the family. While her mother has 2019 investment income of $10,000, s...

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Exam Exercise Chapter Four - Canada Caregiver Tax Credit Elaine Markham lives with her husband and 11-year-old daughter. Her husband’s income is less than the basic personal tax credit amount. Her 81-year-old mother also lives with the family. While her mother has 2019 investment income of $10,000, she has a physical infirmity that makes her dependent on Elaine. Determine the amount of Elaine’s Canada caregiver tax credit, if any, for 2019.

Exam Exercise Chapter Four - Infirm Spouse And Infirm Child Margo Riche is married to John Riche. John has a mental infirmity. They have a 22-year-old daughter who has a physical infirmity. Neither infirmity is severe enough to qualify for the disability tax credit. John has 2019 Net Income For Tax Purposes of $6,600. Their daughter has no 2019 income. Determine the amount of any 2019 tax credits that Margo will have related to her spouse and daughter.

Exam Exercise Chapter Four - Infirm Spouse And Infirm Child Farah Delorme is married to Frank Delorme. Frank has a mental infirmity. They have a 26-year-old son who is dependant because of a physical infirmity. Neither infirmity is severe enough to qualify for the disability tax credit. Frank has 2019 Net Income For Tax Purposes of $4,600. Their son has no 2019 income. Determine the amount of any 2019 tax credits that Farah will have related to her spouse and son.

Exam Exercise Chapter Four - Infirm Eligible Dependant Who Is Child Under 18 Sheila Cox is a single mother who takes care of her 14-year-old daughter, Susan. Susan has a physical infirmity. The infirmity is not severe enough to qualify for the disability tax credit. Susan has 2019 Net Income For Tax Purposes of $3,400. Determine the amount of any 2019 tax credits that Sheila will have related to her daughter.

Exam Exercise Chapter Four - Infirm Eligible Dependant Who Is Child Under 18 Gloria Mason is a single mother who takes care of her 10-year-old son, Mark. Mark has a physical infirmity. The infirmity is not severe enough to qualify for the disability tax credit. Mark has no income of his own. Determine the amount of any 2019 tax credits that Gloria will have related to her son.

Exam Exercise Solution Chapter Four - Canada Caregiver Tax Credit As she has a physical infirmity, Elaine’s mother would qualify for the Canada caregiver credit. The amount would be $1,071 [(15%)($7,140)].

Exam Exercise Solution Chapter Four - Infirm Spouse And Infirm Child Margo will be entitled to the spousal tax credit, including the additional amount for an infirm spouse. In addition, she can claim the Canada caregiver credit for her 22 year old infirm daughter. The total credits would be calculated as follows:

Spousal Including Infirm Amount ($12,069 + $2,230 - $6,600)

$ 7,699

Canada Caregiver ($7,140 - Nil)

7,140

Total Base

$14,839

Rate

15%

Margo’s Tax Credits Related To Spouse And Daughter

$ 2,226

Exam Exercise Solution Chapter Four - Infirm Spouse And Infirm Child Farah will be entitled to the spousal tax credit, including the additional amount for an infirm spouse. In addition, she can claim the Canada caregiver credit for her 26 year old infirm son. The total credits would be calculated as follows:

Spousal Including Infirm Amount ($12,069 + $2,230 - $4,600)

$ 9,699

Canada Caregiver ($7,140 - Nil)

7,140

Total Base

$16,839

Rate

15%

Farah’s Tax Credits Related To Spouse And Son

$ 2,526

Exam Exercise Solution Chapter Four - Infirm Eligible Dependant - Child Under 18 Sheila would claim the Canada caregiver amount for a child under ITA 118(1)(b.1). She would also claim the eligible dependant credit for Susan. Because she claims the Canada caregiver amount for a child, she cannot claim the additional amount for an infirm eligible dependant. Her total credits would be as follows:

[(15%)($2,230) + (15%)($12,069 + Nil - $3,400)] = $1,635

Exam Exercise Solution Chapter Four - Infirm Eligible Dependant - Child Under 18 Gloria would claim the Canada caregiver amount for a child under ITA 118(1)(b.1). She would also claim the eligible dependant credit for Mark. Because she claims the Canada caregiver amount for a child, she cannot claim the additional amount for an infirm eligible dependant. Her total credits would be as follows:

[(15%)($2,230) + (15%)($12,069 + Nil)] = $2,145...