Solution to P4-10
Employment income 20X6:
ITA 5(1)
Salary
- QR Ltd.
$56,000
- AP Ltd.
2,000
58,000
ITA 5(1)
Holiday pay
1,000
ITA 5(1)
Commission advance
1,500
ITA 6(1)(f)
Insurance receipts - $4,500 - ($500 + $3,000)
1,000
ITA 6(1)(e)
Standby charge - 35,000 x 2% x 7 months
$4,900
ITA 6(1)(k)
Auto operating benefit - 24¢ x 12,000 km
2,880
7,780
less reimbursement
(800
)
6,980
ITA 7(1)
Stock option benefit - 4,000 shares x ($8 - $6)
8,000
76,480
Employment expenses:
ITA 8(1)(m) RPP
(4,000)
ITA 8(1)(b)
Legal - salary dispute
(800)
ITA 8(1)(h.1)
Auto lease - $904 x 2 months (Note 3)
$1,808
Auto operating costs
900
$2,708
Employment portion - 70%
(1,896
)
Net employment income
$69,784
Notes
:
1. The commission earned in 20X6 but not received until 20X7 is included in employment
income in 20X7 [ITA 5(1)].
2.
The employer’s contribution to the RPP ($4,000) and the $500 premium for group
sickness and accident insurance paid by the employer are not taxable benefits.
They
are specifically excluded [ITA 6(1)(a)(i)].
3. Ebo paid car lease payments of $960 per month.
Automobile lease payments for tax
purposes are limited to $800 (plus tax) per month.
Therefore, the monthly amount
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- Winter '10
- TranCheung
- Taxation in the United States, ITA
-
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