DISCLAIMER: All characters appearing in this problem are fictitious.

Any resemblance to real persons,

living or dead, is purely coincidental.

Mr. Buddy Musician (SIN 527-000-061) was born in Vancouver on August 28, 1952. He has spent most of
his working life as a pianist and song writer. He and his family live at 111 WWW Street, Vancouver, B.C.
V4H 3W4, phone (604) 111-1111.

Mr. Musician’s wife, Natasha (SIN 527-000-129), was born on June 6, 1994. She and Mr. Musician have
four children. Each child was born on April 1 of the following years, Linda; 2014, Larry; 2015, Donna;
2016, and Donald; 2017. Natasha’s only income during 2019 is $3,200 from singing engagements.

Buddy and Natasha Musician have two adopted children. Richard (SIN 527-000-285) was born on March
15, 2002 and has income of $2,800 for the year. Due to his accelerated schooling, he started full time
attendance at university in September of 2019 at the age of 17. His first semester tuition fee is $3,000
and he requires books with a total cost of $375. These amounts are paid by Mr. Musician.

The other adopted child, Sarah, was born on September 2, 1999, and is in full time attendance at
university for all of 2019 (including a four- month summer session). Her tuition is $9,600 and she
requires textbooks which cost $750. These amounts are also paid by Mr. Musician. Sarah has no income
during the year.

Neither Richard nor Sarah will have any income in the next three years. They both have agreed that the
maximum tuition amount should be transferred to their father.

Mr. Musician’s mother, Eunice, was born on April 10, 1932 and his father, Earl, was born on November
16, 1930. They both live with Mr. Musician and his wife. While his father has some mobility issues, he is
not infirm. His mother is legally blind. Eunice Musician had income of

$9,500 for the year, while Earl Musician had income of $7,500.

Other information concerning Mr. Musician and his family for 2019 is as follows:

1. Mr. Musician earned $16,500 for work as the house pianist at the Loose Moose Pub. His T4 showed
that his employer withheld $500 for income taxes and $287.30 for EI. No CPP was withheld as he has
previously filed an election to stop contributing to the CPP.

2. During the year, Mr. Musician made his annual $3,000 donation to Planned Parenthood Of Canada, a
registered Canadian charity.

3. Mr. Musician has been married before to Lori Musician (SIN 527-000-319). Lori is 52 years old and
lives in Fort Erie, Ontario.
4. Mr. Musician has two additional children who live with their mother, Ms. Dolly Nurse (SIN 527-000-
582), in Burnaby, British Columbia. The children are Megan Nurse, aged 12 and Andrew Nurse, aged 14.
Neither child has any income during 2019. While Ms. Nurse and Mr. Musician were never married, Mr.
Musician acknowledges that he is the father of both children. Although Buddy has provided limited
financial aid by paying their dental and medical expenses, the children are not dependent on Buddy for
support.

5. Mr. Musician wishes to claim all his medical expenses on a calendar year basis. On December 2, 2019,
Mr. Musician paid dental expenses to Canada Wide Dental Clinics for the following individuals:

Himself $1,200
Natasha (wife) 700
Richard (adopted son) 800
Sarah (adopted daughter) 300
Linda (daughter) 100
Earl (father) 1,050
Lori (ex-wife) 300
Dolly Nurse (mother of two of 675
his children)
Megan Nurse (daughter of Dolly 550
Nurse)
Total $5,675

6. Mr. Musician signed a contract with Fred Nesbitt on January 13, 2019 to do permanent modifications
to his house. The contract was for the installation of ramps with sturdy hand railings outside his front
and back doors to give his parents easier access to the house and modifications to their bathroom so
they would be less likely to fall when using the shower. The contract price was $5,800. As neither of his
parents has a severe and prolonged mobility impairment, these expenditures are not eligible medical
expenses.

7. Mr. Musician paid four quarterly instalments of $1,000 each (total of $4,000) for 2019, as requested
on his Instalment Reminders from the CRA. He paid each instalment on the due date.

8. Mr. Musician receives $7,271.67 in Old Age Security payments and $5,500 in Canada Pension Plan
“retirement benefit” payments over 12 months. There was no tax shown as withheld on his T4A(OAS) or
his T4A(P).

9. Mr. Musician builds a state-of-the-art home theatre in a new extension of his home. In order to
finance it, he sells stock in his RRSP and withdraws the funds from his RRSP. His T4RSP showed $52,000
in withdrawals from the House of Rock Bank (Box 22) and total tax of $15,600 deducted from these
payments.

10. Several of Mr. Musician’s songs, including his outstanding hit, “Drop Kick Me Jesus Through The Goal
Posts Of Life”, have provided him with substantial royalty payments over the years. In 2019, the Never
Say Die Record Company paid him $78,000 in royalty payments. No T5 was issued by the Company.

11. In order to ensure the financial security of his family, Mr. Musician decided to return to songwriting
in earnest. On November 1, 2019, he rented a small, quiet studio for $700 a month and purchased a
Roland electric piano for $7,750 that was delivered there. He does not plan to use the space or piano for
personal enjoyment, only for composing.

12. The previous year, on January 2, 2018, Mr. Musician elected not to make any further CPP
contributions on his self-employed income.

13. Mr. Musician is required by a court order to pay spousal support of $400 per month to his former
spouse, Lori Musician. Mr. Musician made spousal support payments of $4,800 during 2019.

14. Mr. Musician is required by a court order to make child support payments of $350 per month to
Dolly Nurse for his two children, Megan and Andrew Nurse. A total of $4,200 was paid during the year.

15. Mr. Musician made contributions to the Federal Liberal Party in the amount of $610 during the year.

16. Mr. Musician made a $5,000 contribution to his TFSA during the year. Thanks to the excellent
investing advice of his gardener, the balance in his TFSA account has grown to more than $175,000 by
the end of the year.

Required: With the objective of minimizing Mr. Musician's Tax Payable, prepare Mr. Musician’s 2019
income tax return using the ProFile tax software program assuming Natasha does not file a tax return.
List any assumptions you have made, and any notes and tax planning issues you feel should be placed in
the file.