In 2021, Irene paid the following amounts: CPA professional dues - $1,300 on June 30^th.

Employment expenses: Irene paid for supplies (used for employment purposes) in the amount of $850. The expenses were approved by ABC Corp. Irene received her T2200 to support this.

On May 1st of 2020, ABC provided Irene with an employee loan in the amount of $20,000 at an annual interest rate of 0.5%. The loan requires annual principal repayments of $2,000 on April 30^th of each year. Irene made her annual repayment on April 30^th 2021.

The CRA prescribed interest rates for the calendar quarters are as follows:

Quarter	Rate
Quarter 1 (Jan 1 – Mar 31)	2%
Quarter 2 (Apr 1 – June 30)	3%
Quarter 3 (July 1 – Sept 30)	4%
Quarter 4 (Oct 1 – Dec 31)	2%

Required:

1. Using the information in Exhibit I only, for each amount paid by ABC Corp. that was not reported on Irene’s T4 slip, determine if the amount is a taxable or non-taxable benefit.

2. Calculate the total amount of taxable benefits for Irene in the current year and provide appropriate references to the ITA. For a complete response, make sure you consider all the information:

• If you determined that something was “taxable” in your answer from Part 1, make sure you include that in your answer for Part 2.
• Use the information provided in Exhibit II.
• Use the information in Exhibit III to calculate the loan interest benefit.

3. Calculate Irene's net employment income for the current year in accordance with sections 5 to 8 of the Income Tax Act. Provide appropriate references to the ITA. Irene does not qualify for 8(1)f as she is not a sales commission employee.

• If you determined Jala paid for something that was deducted from her paycheck and this is a deductible expense, make sure to include it. See T4 in Exhibit I.
• Use the information provided in Exhibit III

	Required: Calculate Irene's net employment income for the current year in accordance with sections 5 to 8 of the Income Tax Act. Round your calculations to the nearest dollar and provide appropriate references to the ITA or rationale.
	Complete the table below with the salary and deductions amounts, and calculate the net employment income. (Round your calculations to the nearest cent, and provide appropriate references to the ITA. Use parentheses or a minus sign to enter a net loss.)
	Income / Benefit		Amount	ITA Section Reference or rationale
1	Salary
	Total benefits - as calculated in Part 2
	Employment deductions		Amount	ITA Section Reference or rationale
1
2
3
4
	Total deductions		$ -
	Net employment income		$ -

Answer rating: 100% (QA)

1 CPA professional dues 1300 on June 30th nontaxable benefit 2 Employment expenses 850 taxable ben... View the full answer