Harjot Earned $85,000 in 2020 as a Full-Time Teacher, and Also

question 5

Essay

Harjot earned $85,000 in 2020 as a full-time teacher, and also generated revenues or $8,000 from a part-time farm on the family's acreage.The farm expenses totaled $12,000.
The following information pertaining to Harjot's 2020 tax return has also been provided to you:
1) Net capital losses from 2019 totaled $10,000, and non-capital losses from 2019 totaled $2,000, and neither could be carried back to previous years.
2) Harjot had the following amounts deducted from his pay during the year: CPP and EI of $3,754 (which includes the CPP Enhanced Contribution of $166) and income tax of $19,000.
3) Harjot contributed $5,000 to a TFSA and $15,000 to a guaranteed investment certificate (GIC) which pays 4% annual interest.The first interest receipt for the GIC will be on June 30, 2021.
4) Harjot received a $1,000 non-eligible dividend in 2020.
5) Harjot's spouse works full-time and earns $68,000 a year.
6) Harjot had extensive dental work done in 2020.The total cost was $7,500 and Harjot did not receive any reimbursement for the cost.
Required:
A.Calculate Harjot's net income for tax purposes for 2020 in accordance with Section 3 of the Income Tax Act.
B.Calculate Harjot's taxable income for 2020.
C.Calculate Harjot's minimum federal tax liability for 2020.(Round all amounts to zero decimal places.
D.Identify carry over item(s) and related amount(s).

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