On January 2, 20X3, Sheldon Bass, a professional engineer, moved from Calgary to Edmonton to commence employment with Acco Ltd.,
On January 2, 20X3, Sheldon Bass, a professional engineer, moved from Calgary to Edmonton to commence employment with Acco Ltd., a large public corporation. Because of his new employment contract, Bass requires assistance in determining his employment income for tax purposes. He has provided the following financial information:
1. Bass’s salary in 20X3 was $95,000. From this, Acco deducted Employment Insurance premiums of $914, Canada Pension Plan contributions of $2,426, registered pension plan payments of $6,000, and charitable donations of $1,200 as well as income tax.
2. Acco provides its executives with a bonus plan. Bass’s 20X3 bonus was $20,000, of which $5,000 was received in December 20X3 and the balance in March 20X4.
3. In November 20X3, Bass asked his employer to loan him $12,000 so that he could acquire an investment. Acco advised him that it was company policy not to make loans to employees. However, they gave him the $12,000, stipulating that it was an advance against his 20X4 salary, which would be reduced accordingly.
4. In 20X3, Bass was provided with a company car, which he drove 14,000 km for employment duties and 8,000 km for personal use. The car was leased at $500 per month. The total operating costs of $7,000 were paid by Acco. The car was available for personal use throughout the year.
5. Bass’s moving expenses to transport his belongings to Edmonton were $3,000. Acco paid this cost directly to a moving company on Bass’s behalf.
6. Bass travels extensively for Acco. In December 20X3, he and his spouse used some of the travel points he had accumulated from this travel to attend his father’s funeral in Toronto. As a result, he saved the normal airfare of $400 per ticket.
7. Acco paid the following additional amounts for Bass:
Allowance ($300 per month) for acquiring executive apparel…… $3,600
Investment counsellor fees as part of Acco’s counselling program…. 600
Golf club dues (Bass rarely uses the club to conduct business)…….. 1,500
8. In 20X3 Bass paid for the following:
Dues to the engineers’ association… $ 800
Laptop computer and printer……. 2,200
Computer supplies (paper, etc.)… 100
Acco had asked each senior executive to acquire a laptop computer at his or her own expense for work during travel.
9. In 20X3, Bass sold 1,000 shares of Kolex Ltd. (his former employer) at $10 per share. Kolex is a Canadian-controlled private corporation. The shares were purchased under a stock-option plan in 20X0 at $3 per share. Appraised value at that time was $5 per share.
Determine Bass’s net income from employment for the 20X3 taxation year.
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