Ed Sigmond was transferred from England to Ottawa by Pharmadyne Supplies Inc. on April 1, to assume the permanent position as Vice President, Canadian operations. Ed was a permanent resident of England prior to the move. His earnings for the year are as follows:
Gross salary - January 1 to March 30 ........................... $ 12,000
Income tax paid in England .......................................... (3,200)
Gross salary -April 1 to December 31 ........................... $ 62,000
Income tax withheld ................................................. (21,000)
CPP/EI withheld ....................................................... (2,100)
Donations to United Way withheld ................................... (400)
Ed's spouse, Laura, arrived in Ottawa on July 15, with three children (all over six years of age). On August 1, she resumed her full-time studies at the University of Ottawa, where she was awarded a $500 scholarship. In England, she had attended the University of Cambridge from January 1 to April 30. In England, Laura paid $1,000 per month for a nanny for the children. In Canada, she took her children to the local daycare for $1,360 per month. The Sigmonds also incurred the following moving expenses:
Airfare/lodging - house hunting in Ottawa .............................. $3,500
Airfare - family move ........................................................ 7,000
Moving van fees ................................................................ 3,200
Legal fees and land transfer taxes on acquiring the Ottawa home ...... 5,500
Meals and hotel expenses (12 days prior to employment) ................ 3,800
REQUIRED
Ed is having some problems in calculating his and Laura's income for Canadian tax purposes, and has come to you for assistance. Compute Ed's net income for tax purposes.