Required: Using MICROSOFT Excel ONLY, respond to the following requirements. All work must be shown to obtain full marks.
Prepare a critical thinking analysis to determine whether the sale of the cottage would be considered business income or a capital gain. If you determine the sale would be a capital gain, then determine whether it would qualify for the principal residence exemption.
Prepare a calculation to determine the best use of the principal residence exemption. Clearly indicate the years designated to each property included in your analysis.
Determine John’s minimum Business Income for 2022.
Determine the minimum Net Income for Tax Purposes and Taxable Income for John, Mary, Dean, Rowena, Crowley and Castiel. Ignore any GST or PST considerations. Show all work, even if the result is zero.
Determine minimum Federal Taxes Payable and Net Federal Taxes Owing for the 2022 taxation year for John, Mary, Rowena and Castiel only (not required for Dean or Crowley). When a credit can be claimed by either John or Mary, include it in John’s taxes unless it is more beneficial to have Mary claim it. Ignore any GST or PST considerations. For any amounts provided but excluded from your calculations explain why they have been excluded.
Determine any amounts available for carry forward by the family at the end of 2022.
John received $193,000 for the work he performed for customers in 2022. He incurred the following costs related to this work:
Business insurance 2,600
Truck operating costs 13,800 Note 1
Salary 15,000 Note 2
Entertainment 1,800 Note 3
Charitable donations 6,000
CRA installment payments 20,000
Mortgage interest 6,500
Property taxes 3,900
Home insurance 2,500
Cleaning service 4,800
Chair and desk for office 1,300
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