Summer 2010 Midterm Solution Q2 Corrected Oct 28 10

Summer 2010 Midterm Solution Q2 Corrected Oct 28 10 -...

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Unformatted text preview: Question 2 Marks Salary 90,000 Commission 10,000 RPP contribution withheld ‐ 5,500 Life insurance premium 250 Health plan not taxable benefit ‐ RPP contribution not taxable benefit ‐ Group sickness ‐ employee pay all so not taxable ‐ Stock option benefit: Benefit deferred as CCPC ‐ Loan interest benefit: 20000 x .04 x 30/365 66 20000 x .03 x 184/365 302 No deduction for interest paid as too late ‐ 368 Deduction for interest benefit as investment ‐ 368 Dividend ‐ 2000 x54 x 1.25 12,500 Moving expense reimbursment not taxable ‐ Housing loss benefit ‐ 1/2 x (27500 ‐ 15000) 6,250 Condo benefit ‐ 4 x 1000 4,000 Standby charge ‐ 11000/20004(2/3 x 950 x 12) 4,179 Operating expense benefit (because Widget paid $1,500 car insurance): Lesser of 1/2 standby charge 2,090 11000 x 0.24 2,640 2,090 Car allowance ‐ not by km ‐ 400 x 12 4,800 Travel allowance ‐ unreasonable re expenses 3,600 Entertainment allowance 2,400 Employment expenses Travel & car Accomodation 5,600 Travel meals ‐ 1/2 x $1750 875 Car ‐ 24/35(3000+1500+400+135) 3,453 Parking 500 ‐ 10,428 Since > $10,000 commission, claim 8(1)(h)/(h.1) amount No CCA on computer or I‐phone ‐ not allowed by 8(1)(j) No 8(1)(f) deduction for No Meals & entertainment ‐ 1/2 x 2400 No I‐Phone charges ‐ 50% of 100 x 12 Division B income 124,141 No deductions ‐ Taxable income 124,141 Tax Calculation First 126264 Balance ‐ 29% x (129469‐126264) Credits Basic 26,720 ‐ 616 26,104 10,320 0.5 0.5 0.5 0.5 0.5 0.5 0.5 1 1 1 1 1 0.5 1 1 1.5 0.5 0.5 0.5 1 1 0.5 0.5 0.5 2 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Employment CPP EI Charitable donations ‐ first $200 @ 15% ‐ remaining $325 @ 29% DTC ‐ 13 1/3% of 12500 GST Rebate: employment expenses expenses without GST car insurance & licence 24/35 x (1500 + 135) 1,044 2,119 732 14,215 @15% ‐ 2,132 30 94 ‐ 124 ‐ 1,667 22,181 10,428 ‐1121 9306 x 5/105 443 0.5 0.5 0.5 0.5 1 1 27.5 0.5 1 443 0.5 29.5 ...
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