Paul Fenson is employed as a shipping supervisor. In the evenings and on weekends, he holds a second job as a real estate salesman for a national real estate firm. His financial information for 20X0 is as follows:
1. His salary from his day job is $30,000 per annum. However, the employer deducts a number of items from his salary, and so his net take-home pay is only $19,228. The following amounts were deducted in 20X0:
Income tax …………………………………… $ 3,900
Union dues…………………………………… 600
Canada Pension Plan…………………………………… 1,312
Employment Insurance premiums………………………… 560
Registered pension plan contribution …………………… 3,000
Reimbursement for personal use of employer’s car…… 600
Charitable donations remitted to United Way ………… 800
…………………………………………………… $10,772
The employer paid the following amounts on behalf of Fenson:
Canada Pension Plan…………………………………… $ 1,312
Employment Insurance premiums………………………… 790
Registered pension plan…………………………………… 3,000
Premiums for a mandatory provincial health insurance plan…600
Group term life insurance premiums ($50,000 coverage)…. 1,200
…………………………………………………………… $6,902
Fenson used the employer’s summer camp for a one-month holiday and paid the employer $200 rent. When not being used by employees, the summer camp is rented for the normal amount of $600 per month.
Although Fenson owned his own automobile, he was provided with a company car. The car cost the company $35,000. During the year, he drove a total of 24,000 km, of which 16,800 was for personal use. The employer also paid all of the operating costs, which amounted to $3,000.
During the year, Fenson attended a shipping conference in Toronto. His wife travelled with him at the company’s expense ($1,000). The employer permitted staff to purchase merchandise from its retail outlet at the company’s cost. During the year, Fenson purchased for $800 merchandise with a retail value of $1,200.
2. As a real estate salesman, Fenson earned a base salary of $8,000 and received commissions of $7,000. In relation to his real estate work, he incurred the following expenses:
Dues to a local real estate association ……………… $ 400
Fee for a three-day seminar on how to be an effective salesperson 800
Advertising—calendars and pens……………………………… 1,700
Automobile operating costs……………………………… 4,000
Promotion (meals and drinks for clients) …………………… 2,800
Personal meals (during in-town business) ……………….. 400
Purchase of a portable telephone…………………………… 2,000
Fenson used his own automobile for his real estate activities. The car has an undepreciated capital cost for tax purposes of $10,000. During the year, he drove a total of 30,000 km, of which 27,000 was related to selling real estate. His employer provided him with a monthly car allowance of $200 ($2,400 per year).
Required:
Determine Fenson’s net income from employment for the particular year.