TIF Problem Fifteen - 4 Exam Exercise Twenty - 1 (Carrying On Business In Canada) In each of the following Cases, determine whether Rawlings Inc., a non-resident U.S. corporation, is taxable in Canada: Case 1Rawlings is the parent company of Delma Ltd., a company incorporated in British Columbia. Rawlings produces and sells small construction equipment, while Delma produces and sells hand tools. Rawlings sells pieces of equipment to Delma, who in turn sells them in Canada. Case 2Rawlings manufactures small construction equipment in the U.S. Rawlings ships pieces of equipment to a warehouse located in Winnipeg that is rented on a seven year lease. Rawlings has employed an individual in Winnipeg to sell the equipment throughout central Canada. The employee is not allowed to conclude contracts without approval by the U.S. office. Case 3Assume the same facts as in Case 2, except that the employee has the authority to conclude contracts on behalf of the employer. Exam Exercise Twenty - 2 (Non-Resident Liability For Tax) Ms. Michelle Walker, a U.S. citizen, has Canadian employment income of $22,000 and U.S. employment income of $40,000 Canadian for the current year. The Canadian employment income is from a British Columbia company that can deduct the payments in its Canadian tax return. She lives in Seattle, Washington and is a resident of the United States for the entire year. Ms. Walker does not believe that she is subject to taxation in Canada. Is she correct? Explain your conclusion. Exam Exercise Twenty - 3 (Non-Resident Employment In Canada) In each of the following Cases, determine whether the employment income is taxable in Canada: Case 1Mary resides in the state of Maine. She accepted temporary employment as a personal trainer with a Canadian company for clients in New Brunswick beginning August 1, 2019 and ending on December 31, 2019. The Canadian employer agreed to pay her $2,660 Canadian per month. Mary remained a non-resident of Canada throughout her Canadian employment. Case 2Assume the same facts as in Case 1, except the employer was resident in Maine and did not have a permanent establishment in Canada. Case 3Bill resides in Watertown, New York and has commuted daily to a full-time job in Kingston, Ontario for the last five years. In 2019, he spent 217 days at his job in Canada. He works for the municipality of Kingston and earned $53,000 Canadian in employment income. Bill is a U.S. resident throughout the year. 775 Canadian Tax Principles 2019/20 Edition – Test Item File Problems
TIF Problem Fifteen - 3 Exam Exercise Twenty - 4 (Non-Resident Employment In Canada) In each of the following Cases, determine whether the employment income is taxable in Canada: Case 1John lives in Blaine, Washington and is a U.S. citizen. However, he is employed by a business in Chilliwack, British Columbia. His salary for 2019 is $72,000. As he is able to do some of his work in his home office in Blaine, he commutes to Chilliwack for 150 days during 2019.
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