1 Glen’s legal representative would like to minimize the total tax liability. Determine the amount of each item and its amount that should be included in Glen’s terminal or optional returns, if any. (Round to the nearest dollar).
2 What tax deductions and credits are available for Glen? On which returns these deductions/credits can be claimed? (Assume the total personal credits available for the full year of 2015 had Glen not died was $15,000).
Glen died on October 31st, 2015. He was married and his wife, Janice, was the sole beneficiary of his estate.
Glen purchased 1500 shares of Royal Bank on the Stock Exchange in 1997 and on September 1, 2015 Royal Bank declared a dividend of $10 / share. The dividends were paid on November 15, 2015.
He earned an annual salary of $100,000. Box 14 of his T4 slip reported $93,000 comprised of employment income for $83,000 and unpaid vacation for $10,000 (assume he has absolute right to receive the unpaid vacation pay amount).
Glen received a pension income from his RRIF of $2,200 per month. After his death, Janice will continue to receive the pension income.
Glen owned a Government of Canada bond that has an annual interest rate of 8% and a face value of $100,000. An interest payment of $8,000 was made to Glen’s estate on December 31, 2015 (interest income is accrued in equal daily amount).
Glen also owned a rental property in Toronto. The income and expenses from January 1, 2015 to December 31, 2015 is shown in the table below:
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Glen had an unused RRSP contribution room of $50,000 from his 2014 T1 Notice of Assessment from CRA. He made a RRSP contribution of $3,000 in May 2015.
During the last two months of his life, Glen incurred medical expenses of $8,600. He also had an unclaimed medical expense of $2,800 from December 2013 that he forgot to claim in his previous personal tax returns.
