University Tax Report Analysis, FIN 3020, Winter 2020

This report provides a comprehensive analysis of Rosy Evans' tax situation for the year 2019, based on the provided information from her income tax return and project brief. It calculates her total income, net income, and tax liability, determining a tax refund of $1,704.93. The report offers detailed recommendations on various tax implications, including medical disability amounts, RRSP contributions, executive MBA tuition fees, TFSA savings, car expenses provided by an employer, and loans from an employer, along with the effects of CCPC stock options. The analysis considers rental income from a six-plex property, detailing rental income, expenses (hydro, water, gas, mortgage, property taxes, maintenance, insurance, management fees, and superintendent salary), and property income. The report addresses how these factors influence Rosy's overall tax position and provides suggestions for optimizing her tax planning. The assignment is a project for FIN 3020, Winter 2020, and is due on April 19, 2020.

Running head: TAX
Tax
Name of the Student:
Name of the University:
Authors Note:

1
TAX
MEMO
Date: 19 April, 2020.
Place: Roseville, Ontario
To: Rosy Evans
From: Professional tax expert.
Sub: Recommendation on tax implications on income and other transactions.
Total income:
Total income of Rosy Evans for 2019 is $84,395 as per the income tax return.
Net income:
Net income of Rosy for the period as per her income tax return is same as her total income
$84,395.
Total tax liability and tax payable or refund:
Total tax liability on the amount of taxable income of Rosy is $10,519.07 for the year 2019 with
$12,000 already paid as tax instalment Ms Rosy is eligible for a tax refund of $1,704.93.
Recommendation on tax implications:
Medical disability amount:
The amount of expenditure incurred by Rosy on her disable and dependant mother is only
allowed as deduction if all the necessary conditions attached to medical expenses have been
complied with by her.

2
TAX
Contribution in RRSP:
Since, no amount has been contributed by Rosy in RRSP hence, she has lost out on the
opportunity of reducing her taxable income and income tax liability as the RRSP contributions
are fully deductible for tax purposes subject to the maximum amount. A contribution of any
amount in RRSP would have reduced both taxable income and resultant income tax liability
proportionately for the tax payer.
Executive MBA:
Tuition fees are eligible for deduction to compete taxable income of the person undertaking such
MBA. Thus, the amount of tuition fees and eligible course fee for the executive MBA would
have been allowed as deduction from gross income of Rosy to compute her taxable income and
tax liability.
TSFA:
Savings in Tax savings free account by residents of Canada is tax free and any withdrawals made
from the account is also tax free subject to certain conditions. Thus, by saving in TSFA account
Rosy could have reduced both her net income and tax liability.
Car provided by an employer:
In case car is used only for employment purpose then no amount is added to the employment
income however, here only 200 km has been used for employment purpose out of 2000 km that
the car has ran during 2019. Thus, 90% of total expenses relating to the car including car rental
and operating expenses are to be included along with other employment income to compute the
taxable amount of employment income of the employee.

3
TAX
An amount of $12,510, i.e. 90% of $13,900 (11400 x 2500) is to be added to other employment
income of the employee to compute his / her taxable income from employment for the period.
Loan provided by the employer:
In this case since the interest charged from employee is lower than prescribed rate of interest on
such loan hence, $3,250 {(100000 x 3% x 1/12) + (100000 x 4% x 9/12)} shall be added to the
employment income of the employee.
CCPC effects:
Stock option issued by a CCPC is not to be considered for calculation of employment income for
the person to whom the stock option has been granted.