Callie is employed as plant manager of Witty Enterprises Limited, a Canadian-controlled private corporation. She is provided with a car owned by the corporation to allow her to travel to the various plants and offices of the firm. An amount is withheld from her salary for the personal use of the car. Callie is considered to be a “key employee” and receives various benefits, including stock options. 

a). Following is the break-up of salary received by Callie during 2019 Gross Salary $65,000 Withholdings by employer from salary: Canada Pension Plan $2,927.4 Employment Insurance $800 Income tax $4,000 

b). Besides the salary, Callie has following benefits from her employment: 

1.Automobile Benefit • a standby charge for the year $2000 • an operating expense benefit for the year $1,000 

2. Gifts and Awards Cash gifts worth $ 500 Non-Cash Gifts $ 650 

c). Witty Enterprises limited granted her an option to purchase 300 shares for $15.On March 10, 2019, she acquired 150 shares under the option. The following pertains to the shares Date FMV Option Granted March 10, 2009 $ 10 Option Exercised March 10, 2019 $ 22 

d). Callie was enrolled as a full-time student at Seneca for eight months during 2019.Callie provides you with the following information Scholarship income $4,000 Qualified tuition fees $ 5000 Callie has unused tuition credits from previous years of $ 4000. 

e). Callie’s capital property transactions during 2019 were as under: 

1. Callie sold her personal computer having an ACB of $900 for $1100 

2. Callie sold her personal car having an ACB of $10,000 for $8,000 

3. Callie sold the rare book having the ACB of $800 for $1300 

4. Callie sold her investment property No 6660, North Yok having an ACB of 200,000 for $400,000 

f). During the year, Callie had a trading business, the income statement for which is under Revenue Sales $150,000 Expenses Cost of Goods Sold $60,000 Wages & Salaries $10,000 Utilities $5,000 Meals & Entertainment $4,000 CRA Interest $2,000 Illegal Payments $1,000 Depreciation $5,000 Income Tax Expenses $3,000 Total Expenditure $90,000 Net Profit $60,000 Note: CCA $7,000 

g). During the year, Callie had a gross rental income of $30,000 from her residential property. Callie spent $ 4,500 on repairs and maintenance of the said property. 

Instructions 

1). Compute Callie’s taxable income and federal tax liability after claiming all credits- Basic Personal Income tax credit, Canada employment tax credit, Credit for Employment Insurance premiums and CPP contributions and Tuition Fee, Education and Text book credit. 

2). Please show your workings on a separate sheet and submit the same with the completed tax return. 

Answer rating: 100% (QA)

Step 1 We need to calculate Callies taxable benefit for employerprovided automobile Cost of vehicle including taxes 25000 of months available for use 12 Total kilometres driven both for business and f... View the full answer