Chris Nowicki Was Employed by REAL Co Required:
Determine Chris's Minimum Net Income for Tax Purposes for from January

question 7

Essay

Chris Nowicki was employed by REAL Co.in 2020.Chris earned $35,000 from January 1 to October 10 before transferring with the company to a town 1312 kilometres away.The new position began on November 1, 2020, and paid Chris a gross salary of $4000 per month.
The support payments are in accordance with Chris's divorce agreement, which calls for monthly support payments of $1,500 for Chris and $1,500 for Chris's child.
Additional information:
Assumed mileage rates:
$\begin{array}{|l|l|}\hline \text { New location: } & 50 \text { cents per kilometer } \\\hline \text { Previous location: } & 47 \text { cents per kilometer } \\\hline\end{array}$ Required:
Determine Chris's minimum net income for tax purposes for 2020 in accordance with Section 3 of the Income Tax Act.Show all calculations for the moving expenses and identify any amounts to be carried-forward.

Chris's moving expenses included:
1.$7,000 for a moving van
2.$300 for meals for Chris and Chris's 4-year-old child on the four-day drive
3.$700 for accommodations on the four-day trip
4.$3000 ($150 per day) for 20 nights of temporary lodging in the new location until an apartment was available
5.$550 in gas receipts
Chris was not reimbursed for the move.
Chris also received the following in 2020:
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Support payments from a former spouse } \\(\$ 3,000 \times 12)^{*}\end{array} & \$ 36,000 \\\hline \text { Inheritance } & 25,000 \\\hline \begin{array}{l}\text { Scholarship for part-time tuition in a } \\\text { qualifying education program (used to } \\\text { cover tuition) }\end{array} & 2,000 \\\hline \text { RRSP withdrawal (not withdrawn under } & 15,000 \\\text { the Lifelong Learning Plan or Home } & \\\text { Buyer's Plan) } & 500\\\hline\end{array}$

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Definitions:

Yearly Contribution

The amount of money contributed to an investment or savings account on an annual basis.

Traditional Retirement Plan

A tax-deferred retirement savings account where contributions may lower current taxable income and earnings grow tax-free until withdrawn.

Roth Retirement Plan

A type of retirement savings plan where contributions are made with after-tax dollars, and qualified withdrawals in the future are tax-free.

Income Growth

The increase in the amount of money earned from investments or employment over time, reflecting economic expansion or personal financial improvement.