It is late March 2020

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It is late March 2020. You have just met with your client Ahmed about his taxes. Ahmed has several tax issues for the 2019 taxation year that he needs your help with.

1. AhmedhastwoT4slipsfrom2019,ashemovedduringtheyear:

                                Ontario Employer      Nova Scotia Employer

Employment income                  62200              65000

CPP deducted                       2749               2749

EI deducted                         860                 860

RPP contributions                    2500                1500

Pension adjustment                   4000                3000

Income tax deducted                  12000               12500

2. AhmedandhisdaughterZeinabmovedfromOntariotoNovaScotiaduring2019for work, which he began right away. Their moving expenses include the following items:

Movers — packing and transporting furniture and belongings        6000

Selling costs of Ontario home        4000

Legal costs to acquire new home in Nova Scotia     1250

Costs related to vacant former home while up for sale    5500

Costs to repaint new home       4000

Gas to drive family car to Nova Scotia      200

Two nights in hotel for the family     400

Meals during the trip to Nova Scotia       200

For tax purposes, Ahmed would like to use the detailed method for calculating gas and meals expenses related to moving.

3. AhmedownedarentalpropertyinTorontoforseveralyears.Thepropertycost $500,000, with $150,000 allocated to the land and $350,000 for the building. It was put up for sale at the end of 2018 and was sold in July 2019 for $650,000, with $175,000 allocated to the land. The UCC balance on December 31, 2018, was $322,000. In anticipation of the sale, the tenant had moved out on December 31, 2018, and the property had been vacant until it was sold.

Ahmed used the proceeds of the sale to purchase another residential rental property in Halifax on August 1, 2019. He does not want to defer any gains or recapture. Ahmed gave you the following income and expenses for this property for the year, along with its cost:

Rental income      30000

Total expenses      36000

Total cost of property      480000

Portion of cost allocated to land      80000

Ahmed also advises you that he sold a piece of vacant land at a significant loss this year. He had planned to build a rental property on the land but learned after purchasing it that it was highly polluted. The cost of this land was $200,000, and it was sold for $30,000 in 2019.

1. AhmedhasaT5slipfrom2019indicatingthatheearnedaneligibledividendof $20,000 and interest income of $300.
2. Forthe2019taxationyear,AhmedmadeRRSPcontributionsof$3,000.Thisishis first RRSP contribution, and his RRSP deduction limit for 2019 is $120,000.
3. Ahmedpaysspousalsupportpaymentstohisex-wifeof$500permonth.Heis behind in his payments and was only able to pay $3,500 in 2019.

Required:

1. a) Calculate the following for the 2019 taxation year. Provide explanations for omitted amounts.
2. i) Ahmed's rental income and any taxable capital gains and allowable capital losses from the sale of the real estate properties that he sold during 2019 (4.5 marks)
3. ii) Ahmed's deductible moving expenses (4.5 marks)
4. b) Calculate net income for tax purposes for Ahmed for 2019. (6.5 marks)
5. c) DetermineAhmed'sestimatedRRSPdeductionlimitfor2020.(4.5marks)

Note: Round all amounts to the nearest dollar and ignore GST and provincial taxes. Show the full detail of all steps in your calculations, even if the result is zero.