Alex is a salesperson and has been employed by CCI for several years. CCI is a Canadian Control Private Corporation (CCPC). The company carries on a business of selling clothing through retail outlets in Calgary. During the year, Alex salary was $120,000. CCI withheld the following amounts from his earnings:Federal and provincial income tax20,400EIpremiums953CPPcontributions3,500PHSP—Employee portion900Union dues100Disability plan275

Additional details regarding Alex's employment are as follows:

1. Alex was granted options to buy 1,000 of the company's shares at $35 per share. This option price was lower than the estimated FMV of the company's shares at the time the options were granted in January 2022. On July 15, 2022, Alex exercised these options. At this time the FMV of the shares was $48 per share. Alex sold the shares before the end of the year when the FMV of the shares increased to $56.

1. Alex obtained a low-interest loan from CCI to acquire a car for employment-related purposes. On January 1, 2022, he borrowed $30,000 and was obligated to pay a 2% interest rate on any remaining balance. Assuming the prescribed rate for the year is 3%, Alex repaid $10,000 of the principal amount to CCI on October 1. Subsequently, all outstanding interest was settled on January 15, 2023.

During the year, Alex has disposed of several capital properties; the information is as follows.

Proceeds Coast Antique Car$38,000$45,000Painting $2,000$800Diamond ring $850$1,200

Alex has an unclaimed capital loss on listed personal property of $500 that was incurred 3 years ago.

Alex acquired a house in 2017 for $450,000. In 2020, he purchased a cottage in Revelstoke for $240,000. He lived in the house most of the time and in the cottage for most of the long weekends. In 2022, he sold both properties. He received proceeds of $500,000 for the house and $270,000 for the cottage.

Alex came into possession of a rural piece of land located outside Calgary through inheritance. However, due to time constraints, Alex found it difficult to utilize or manage the land effectively. In 2022, he made the decision to sell the land. He negotiated a selling price of $400,000, while the cost of the land to Alex was $100,000. Unfortunately, the buyer was only able to make a payment of $10,000 in 2022. The remaining balance is scheduled to be paid in three equal installments over the next three years.

During his time at SAIT, Alex pursued a major in finance. Since graduating, he has been utilizing his knowledge to actively engage in stock market investments. He actively participates in buying and selling shares, occasionally making long-term investments to generate additional income.

The following are the investing activities provided by Alex.

• In 2022 Alex received dividends of $3,000 from shares invested in a CCPC.

• He also received $8,500 dividends (net of withholding tax 15%) from his investments in a foreign country.

• Alex purchased 5,000 shares from ABC Ltd, with an adjusted cost base of $10 per share. On December 15, 2022, Alex sold these shares at $8.00 per share. Subsequently, on January 10, 2023, Alex repurchased 4,000 shares of the same class from ABC Ltd at a cost of $9 per share.

• Alex purchase a $10,000 GIC (guaranteed investment certificate) on June 1, 2021. The GIC pays interest at maturity, May 30, 2025, at a rate of 4.75% compounded annually.

Required:

Determine Alex's 2022 Net Income for Tax Purpose. Show your calculations. Show complete solution as ITA3(a) with notes

Answer rating: 100% (QA)

Net Income for Tax Purposes ITA3a step by step 1 Employment Income Total Salary 120000 Withholdings 20400 Income tax 953 EI premiums 3500 CPP contribu... View the full answer