BTAX Case Study W24
Required: Prepare the 2023 personal tax return for Michael Scott using CANTAX software. Use Annotations & Breakdowns to explain entries, calculations, and document assumptions as necessary. Prepare a one-page analysis of the tax considerations Michael is facing in his 2023 return both positively and negatively impacting his return.
Bonus point: What other things could Michael & Holly have possibly done to improve this tax return?
Background: Michael Scott is a District Manager for Staples residing in Ontario. He has moved from Quebec during the past year to get married and join his wife, Holly. He has provided you with attached tax slips & receipts, with other relevant information summarized as follows:
Address: 18 Smith Street, Kingston, ON K6J2Y7
Date of Birth: Oct. 31, 1982
SIN: 123-456-789
Michael and Holly were married September 1, 2023, and have no eligible dependents. Holly has owned the home in Kingston since 2018. She is a human resource manager for Home Depot in Kingston. Her other relevant information summarized as follows:
Maiden name: Flax
Date of Birth is Apr. 1, 1986
SIN: 987-654-321
Michael accepted an offer for his small office supply store in Quebec (which he owned free and clear) for $150,000 May 15, 2023. His initial investment in 2013 was $25,000. The business does not own real estate. Michael has already determined that the sale of shares qualifies for the lifetime capital gains exemption. Michael has never utilized his LCGE.
Michael sold his Condo in Quebec during 2023 prior to his relocation, which was the only home he ordinarily resided in. He purchased the home in 2010 for $345,000 and sold it for $600,000. Selling costs included $15,000 in real estate commissions and $3,000 in legal costs.
Michael provided the following information relating to his relocation:
• Distance from old home to new work 350 km
• Distance from new home to new work 10 km
• Moving Date: June 15, 2023
• New Job Start Date: July 5, 2023
• Distance driven by personal vehicle 340 km