( a ) Determine Cynthia s net income for tax purposes in accordance with the format of...
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Question:
a Determine Cynthias net income for tax purposes in accordance with the format of Section of
the Income Tax Act for the taxation year. Hint: Demonstrate that you can use the Statutory
Formula. If your answer is incorrect and your process is logical than there could be part marks.
marks
b Based on your answer to part a calculate Cynthias federal income tax liability for the
taxation year. Hint: Demonstrate that you can calculate using tax brackets and tax credits. If your
answer is incorrect and your process is logical than there could be part marks. Marks
Your response should not exceed pages. Clearly indicate the names of both students on your report.
Cynthia Dale is years old and retired from her employment with Lego Ltd a Canadian public
corporation, on September
Cynthia has asked you to help her prepare her tax return and to advise her on certain other tax
matters. Information regarding her financial activities for is summarized below.
Cynthias gross salary, to September th was $ From the amount, Lego withheld CPP and
EI premiums totalling $ of which $ were CPP enhanced contribuons In addion to
salary, Lego paid $ directly into Cynthias RRSP at a local bank.
Cynthia used the employers automobile unl her rerement Lego paid the monthly lease cost of
$ plus monthly operang expenses of $ Between January and September Cynthia
drove the car a total of km of which km were for personal use.
Cynthia incurred and paid medical expenses of $ in the year.
In Lego granted Cynthia an option to acquire up to of its shares at $ per share. At
that time, the shares were trading at the same price. In January she purchased shares
when they were trading at $ per share. She purchased an additional shares in July, when
they were trading at $ per share. In November, Cynthia sold shares at $ per share after
receiving a cash dividend eligible of $
Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
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