Question 1 Bella originally paid $30,000 for common shares in Twilight Inc

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Question 1 Bella originally paid $30,000 for common shares in Twilight Inc. (a public company), which pays an annual dividend of $2,000. Bella is considering transferring these shares to either her husband Edward, or her 3 year-old daughter, Renesmee. At the time of consideration of the transfer, the shares are worth $50,000. a} What are the income tax consequences if Bella gifts the shares to Edward i. With the automatic rollover? ii. If they opt out of the rollover? b} What are the income tax consequences if Bella sells the shares to Edward for $30,000 i. With the automatic rollover? ii. If they opt out of the rollover? c} What are the income tax consequences if Bella gifts the shares to Renesmee? Consider the following in your response: I What are the Proceeds of Disposition for Bella? Will she have a capital gain/loss immediately? - What is the ACB for Edward? I Will double taxation occur? I Will attribution of the dividend occur subsequent to the transfer? Why or why not? 0 Will attribution of the capital gain occur {when the shares are ?nally sold to a third party)? Why or why not?

Question 2 Carlisle and Esme are married and successfully completed an adoption in 2019 for Rosalie, a 2-year-old, spending $21,000 in 2019 on eligible adoption expenses in the process. Carlisle is a young teacher in a rural town who operates a lawn maintenance business during the summer months. He has provided you with the following information: 2019 2018 Teaching employment see T4 82,000 Health/dental plan premiums paid by Carlisle see T4 (box 85) 900 Dividends on public co shares (cash received} see T3 3,000 Net income from lawn maintenance business 12,000 1,000 Capital gain on sale of public co shares 18,000 - Capital loss on sale of mutual fund units (14,000} - Capital loss on shares of private co (quali?es as SBC) {15,000} - Carlisle makes annual spousal and child support payments to his ex-wife in the amounts of $6,000 and 510,000 respectively. Carlisle had unused RRSP contribution room from the prior year of $10,000. He made RRSP contributions of $16,000 in April 2019 and withdrew the 530,000 total he had in his RRSP five months later to purchase his first home. Carlisle has used $6,000 of his capital gain exemption in the past to eliminate capital gains on small business investments. Carlisle also spends 250 hours oftime in the year as a volunteer ?re?ghter in his rural community. He does not receive any income forthese services. Carlisle and Esme have unused federal tuition amounts being carried-forward of $4,000 and 56,000 respectively. Esme is employed at a local marketing company (see T4}. She had accumulated signi?cant vacation time over the last few years and so took 2 months off when Rosalie arrived, but returned to work after that and Rosalie entered daycare. Daycare costs amounted to $10,000 in 2019, and an additional $2,000 was spent on food/clothing/supplies for Rosalie. Esme has limited investments but did contribute $5,000 to her TFSA in 2019. She also made donations of $300.

In past years, Carlisle and Esme have not had sufficient medical expenses to claim anything, but they suspect that they have incurred enough recently to finally be able to claim the medical expense credit. Details below: Description Date Amount Carlisle Physiotherapy Evenly from December $2,400 (50% of this was 2018 -June 2019 reimbursed by health plan) Esme Prescription drugs, net October - November $400 of health plan coverage 2019 Carlisle Eye exam, glasses December 2018 $500 Esme Eye exam, contacts March 2019 $450 Rosalie Prescription drugs, net August 2019 $75 of health plan coverage Esme Multivitamins and iron Evenly throughout $250 supplements 2019 Carlisle Laser eye surgery January 2020 $4,500 Required - a) Calculate Carlisle and Esme's net income for tax purposes and taxable income for 2019. Identify any loss carry-overs that exist, if any, at the end of the year. b) Assume Carlisle and Esme have Provincial Taxes Payable of $2,000 and $1,000 respectively. Calculate Carlisle and Esme's balance due/refund. c) Briefly explain why any 2019 items have been omitted from your calculations in parts (a) and (b).

Employer's name - Nom de l'employeur Canada Revenue Agence du revenu Forks Public School Agency du Canada T4 Year Annee 2019 Statement of Remuneration Paid Board Etat de la remuneration payee Employment income - line 10100 Revenus d'emploi - ligne 10100 Income tax deducted - line 43700 mpot sur le revenuretenu - ligne 43700 14 85000 00 22 9000 Protected B when completed / Protege B une fois rempli 54 | Employer's account number / Numero de compte de l'employeur Province of employment Employee's CPP contributions - line 30800 Province d'emploi Cotisations de l'employe au RPC - ligne 3080 El insurable earnings ains assurables d'AE Exempt - Exemption 10 ON 16 24 Social insurance number 2749 00 53100 00 lumero d'assurance sociale PP/QPP EI 12 123 456 789 28 Employment code Code d'emploi Employee's QPP contributions - line 30800 Cotisations de l'employe au RRQ - ligne 30800 CPP/QPP pens Gains ouvrant droit a pension - RPC/RRQ RPC/RRQ AE RPAP 29 17 26 57400 00 Employee's El premiums - line 31200 Employee's name and address - Nom et adresse de l'employe Cotisations de l'employe a l'AE - ligne 31200 Union dues - line 21200 Cotisations syndicales - ligne 21200 Last name (in capital letters) - Nom de famille (en lettres moulees) First name -Prenom Initial - Initiale 18 44 VAMP 860 1300 CARLISLE RPP contributions - line 20700 Cotisations a un RPA - ligne 20700 Charitable donations - line 34900 Dons de bienfaisance - ligne 34900 20 46 800 DO Pension adjustment - line 20600 acteur d'equivalence - ligne 20600 RPP or DPSP registration number No d'agrement d'un RPA ou d'un RPDB 52 50 Employee's PPIP premiums - see over Cotisations de l'employe au RPAP - voir au verso PPIP insurable earnings Gains assurables du RPAP 55 56 Box - Case Amount- Montan Box - Cas Amount - Montant Box - Case Amount - Montant Other information (see over) 85 900 00 T4 (19) Autres Box - Case Amount- Montant Box - Case Amount - Montant Box - Case Amount - Montant renseignements (voir au verso) Employer's name - Nom de l'employeur Canada Revenue Agency Agence du revenu T4 ABC. Co du Canada Year Annee 2019 Statement of Remuneration Paid Etat de la remuneration payee Employment income - line 10100 Revenus d'emploi - ligne 10100 Income tax deducted - line 43700 14 npot sur le revenue retenu - ligne 43700 Protected B when completed / Protege B une fois rempli 65 000 00 22 6000 00 54 Employer's account number / Numero de compte de l'employeur Province of employment Employee's CPP contributions - line 30800 Province d'emploi Cotisations de l'employe au RPC - ligne 3080 I insurable earnings Gains assurables d'AE 16 24 Social insurance number Exempt - Exemption 10 ON 2627 00 53100 00 Numero d'assurance sociale CPP/QPP EI PPIP 12 987 654 321 28 Employment code Code d'emploi Employee's QPP contributions - line 30800 Cotisations de l'employe au RRQ - ligne 30800 CPP/QPP pensionable earnings Gains ouvrant droit a pension - RPC/RRQ RPC/RRO AE RPAP 29 17 26 55000 00 Employee's name and address - Nom et adresse de l'employ Employee's El premiums - line 31200 Cotisations de l'employe a l'AE -- ligne 31200 Union dues - line 21200 Cotisations syndicales - ligne 21200 Last name (in ca ital letters) - Nom de famille (en lettres moulees) First name - Prenom Initial - Initiale 18 44 VAMP ESME RPP contributions - line 20700 Cotisations a un RPA - ligne 20700 Charitable donations - line 34900 enfaisance - ligne 34900 20 46 Pension adjustment - line 20600 acteur d'equivalence - ligne 20600 RPP or DPSP registration number I' d'agrement d'un RPA ou d'un RPDB 52 50 Employee's PPIP premiums - see over Cotisations de l'employe au RPAP - voir au verso PPIP insurable earnings Gains assurables du RPAP 55 56 Box - Case Amount - Montant Box - Case Amount - Montant Box - Case Amount - Montant Other information see over) T4 (19) Autres Box - Case Amount - Montant Box - Case Amount - Montant Box - Case Amount - Montant renseignements (voir au verso)

Canada Revenue Agence du revenu Year Agency du Canada Statement of Trust Income Allocations and Designations Annee 2019 Etat des revenus de fiducia (repartitions et attributions) T3 Actual amount of eligible dividends Taxable amount of eligible dividends Dividend tax credit for eligible dividends Capital gains Capital gains eligible for deduction Montant reel des dividendes Montant imposable des dividendes Credit d'impot pour dividendes Gains en capita Gains en capital admissibles pour determines determines determines deduction 49 3900 00 50 21 Actual amount of dividends other than Taxable amount of dividends other than eligible dividends eligible dividends Dividend tax credit for dividends other than eligible dividends Montant reel des dividendes autres que des Montant imposable des dividendes credit d'impot pour dividendes autres Other income Trust year end Protected B when completed / Protege B une fois rempl dividendes determines autres que des dividendes determines que des dividendes determines Autres revenus Fin d'annee de la fiducia 23 32 39 26 Month Annee Mois Other information Box / Case Amount / Montant Box / Case Amount / Montant Footnotes - Notes (see the back) Autres renseignements (lisez le verso) Recipient's name (last name first) and address - Nom, prenom et adresse du beneficiaire Trust's name and address - Nom et adresse de la fiducia VAMP, CARLISLE MUTUAL FUND Recipient identification number Account number Numero d'identification du beneficiaire Numero de compte Report code Code du genre de feuillet Beneficiary co Code du beneficiaire For information, see the back. 13 (19) 12 14 T 16 18 Pour obtenir des renseignements, lisez le verso.

Question 3 Maxine used to work and live in Alberta but has accepted a new job in Ontario. The new job has a starting salary of $90,000 per year, or $7,500 per month. She moved herself, her spouse and her child there in October, so she could start her newjob on November 1. While they had rented their accommodations in Alberta, they bought a new house in Ontario. She incurred the following expenses as a result ofthe move: 0 canceling the lease on their rental apartment, $1,200. 0 hiring movers to pack and move their household effects, $12,000. 0 legal fees on the house purchase, $1,400. 0 land transfer tax on the house purchase, $3,000. 0 cost of disconnecting utilities in Alberta, $100. 0 cost of connecting utilities in Ontario, $200. 0 airfare from Alberta to Ontario, $3,300. 0 Lunch for the three of them between connecting flights, $40 Required: How much can she claim for moving expenses in the year ofthe move?