Hillary Hawk has been divorced for some time and has sole custody of her two children,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Hillary Hawk has been divorced for some time and has sole custody of her two children, Mark and Mandy. Mark is 13 and Mandy turned 18 on July 1, 2022. Hillary does not receive any child support or spousal support from her former husband. Mark is in high school and has no income of his own. In 2022, her daughter, Mandy, was enrolled part time at a local college. Hillary agreed to pay her tuition of $1,800 as long as Mandy transferred the related credit to her (Hillary). Mandy's 2022 net income is $6,300. During the year, Hillary paid $8,000 for orthodontic work (braces) for Mark. She was reimbursed 50% of the amount through her employer's dental and health plan. In 2022, Hillary made $2,300 of contributions to registered charities. Employment Information Hillary is a sales representative for Bronze Age Inc. (BA), a Canadian public company that special- izes in the marketing of metal sculptures. Hillary's employment contract specifies a base salary of $100,000 plus a commission of 2% of her annual cash sales. In 2022, Hillary's cash sales were $4,800,000. In 2022, Hillary's employer withheld the following amounts from her salary: RPP contributions CPP contributions El premiums 6,200 3,500 953 Premiums for BA's dental and health plan* Professional association dues Federal income tax *The plan is funded 50/50 by the employees and the employer. 3,200 2,700 39,400 Hillary is covered by BA's group term life insurance. Her coverage is equal to her annual base salary ($100,000 for 2022). BA pays a premium to the insurance company of $3 for every $1,000 of coverage. Because of her outstanding sales performance, Hillary received the Salesperson of the Year Award. This award provided her with a cash payment of $1,000, plus an iPad Pro that cost $1,700. In 2022, BA provides Hillary with an automobile that it leases for $650 per month. The automobile was available for her personal use throughout 2022. During this period, she drove the car 42,000 kilometres, of which 38,000 were used for employment and 4,000 for personal use. While BA pays $2,800 to provide Hillary with insurance on the vehicle, they do not pay any of the other operating expenses. Hillary is responsible for her salesperson expenses (including the automobile operating expenses). In 2022 she incurred the following: Total automobile expenses (excluding insurance) Meals and entertainment with clients Hotels $8,500 5,800 3,200 Hillary meets all of the conditions of ITA 8(1)(f) of the ITA (deductible salesperson expenses). She has a T-2200 from her employer. All utilities Property taxes Maintenance Home internet service Insurance on her home. Mortgage interest $4,200 6,500 2,400 900 2,100 11,500 Hillary estimates only 10% of the internet use was for her business because her children stream a lot of entertainment on a variety of devices. She does not claim CCA on her home as she realizes that if she did, this would result in future recapture and capital gains implications. On January 1, 2022, the business had the following UCC balances: Class 8 Class 10.1 In 2022, she acquires additional class 8 property at a capital cost of $12,000. She also sold class 8 property with a capital cost of $9,000 for $1,200. The class 10.1 passenger vehicle had a capital cost $36,000. It was sold in 2022 for $16,000 and replaced with a new passenger vehicle with a capital cost of $41,000. The vehicle is not a zero- emission vehicle. Both vehicles were used solely for the business. She uses the employer-provided automobile for any personal travel. $ 6,912 12,495 In 2022, the business income, determined using ASPE, was $63,000. Included in this amount were the following: Amortization expense Business meals and entertainment Work space in the home costs* $ 5,200 6,400 Nil *Hillary did not believe that these costs could be deducted under generally accepted accounting principles. Required: For the 2022 taxation year, calculate Hillary's minimum: 1. net income, 2. taxable income, 3. federal income tax payable or refund. In determining these amounts, assume the prescribed rate during all four quarters of 2022 is 2%. Ignore any GST/HST & PST considerations. Hillary Hawk has been divorced for some time and has sole custody of her two children, Mark and Mandy. Mark is 13 and Mandy turned 18 on July 1, 2022. Hillary does not receive any child support or spousal support from her former husband. Mark is in high school and has no income of his own. In 2022, her daughter, Mandy, was enrolled part time at a local college. Hillary agreed to pay her tuition of $1,800 as long as Mandy transferred the related credit to her (Hillary). Mandy's 2022 net income is $6,300. During the year, Hillary paid $8,000 for orthodontic work (braces) for Mark. She was reimbursed 50% of the amount through her employer's dental and health plan. In 2022, Hillary made $2,300 of contributions to registered charities. Employment Information Hillary is a sales representative for Bronze Age Inc. (BA), a Canadian public company that special- izes in the marketing of metal sculptures. Hillary's employment contract specifies a base salary of $100,000 plus a commission of 2% of her annual cash sales. In 2022, Hillary's cash sales were $4,800,000. In 2022, Hillary's employer withheld the following amounts from her salary: RPP contributions CPP contributions El premiums 6,200 3,500 953 Premiums for BA's dental and health plan* Professional association dues Federal income tax *The plan is funded 50/50 by the employees and the employer. 3,200 2,700 39,400 Hillary is covered by BA's group term life insurance. Her coverage is equal to her annual base salary ($100,000 for 2022). BA pays a premium to the insurance company of $3 for every $1,000 of coverage. Because of her outstanding sales performance, Hillary received the Salesperson of the Year Award. This award provided her with a cash payment of $1,000, plus an iPad Pro that cost $1,700. In 2022, BA provides Hillary with an automobile that it leases for $650 per month. The automobile was available for her personal use throughout 2022. During this period, she drove the car 42,000 kilometres, of which 38,000 were used for employment and 4,000 for personal use. While BA pays $2,800 to provide Hillary with insurance on the vehicle, they do not pay any of the other operating expenses. Hillary is responsible for her salesperson expenses (including the automobile operating expenses). In 2022 she incurred the following: Total automobile expenses (excluding insurance) Meals and entertainment with clients Hotels $8,500 5,800 3,200 Hillary meets all of the conditions of ITA 8(1)(f) of the ITA (deductible salesperson expenses). She has a T-2200 from her employer. All utilities Property taxes Maintenance Home internet service Insurance on her home. Mortgage interest $4,200 6,500 2,400 900 2,100 11,500 Hillary estimates only 10% of the internet use was for her business because her children stream a lot of entertainment on a variety of devices. She does not claim CCA on her home as she realizes that if she did, this would result in future recapture and capital gains implications. On January 1, 2022, the business had the following UCC balances: Class 8 Class 10.1 In 2022, she acquires additional class 8 property at a capital cost of $12,000. She also sold class 8 property with a capital cost of $9,000 for $1,200. The class 10.1 passenger vehicle had a capital cost $36,000. It was sold in 2022 for $16,000 and replaced with a new passenger vehicle with a capital cost of $41,000. The vehicle is not a zero- emission vehicle. Both vehicles were used solely for the business. She uses the employer-provided automobile for any personal travel. $ 6,912 12,495 In 2022, the business income, determined using ASPE, was $63,000. Included in this amount were the following: Amortization expense Business meals and entertainment Work space in the home costs* $ 5,200 6,400 Nil *Hillary did not believe that these costs could be deducted under generally accepted accounting principles. Required: For the 2022 taxation year, calculate Hillary's minimum: 1. net income, 2. taxable income, 3. federal income tax payable or refund. In determining these amounts, assume the prescribed rate during all four quarters of 2022 is 2%. Ignore any GST/HST & PST considerations.
Expert Answer:
Answer rating: 100% (QA)
To calculate Hillarys minimum net income taxable income and federal income tax payable or refund for the 2022 taxation year well need to go through various components of her financial situation and ap... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these law questions
-
What extent do you think it is appropriate for central banks to compensate for inaction by the legislative and executive branches? What do you think are the normative implications for democracy in...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Formulate a plausible mechanism for the following reaction. The product is a precursor of mediquox (shown in the margin), an agent used to treat respiratory infections in chickens (no, we are not...
-
The compressor of a large gas turbine receives air from the ambient at 95 kPa, 20C, with a low velocity. At the compressor discharge, air exits at 1.52 MPa, 430C, with velocity of 90...
-
If calcium oxide (CaO) is added to glass to break 20% of the bonds between oxygen atoms in the silica (SiO 2 ) matrix and reduce the melting point. If we assume each calcium ion will break two oxygen...
-
How often should performance appraisals be conducted?
-
The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since...
-
What is the prediction of the CAPM with respect to the expected return on any security? Why is the variance of a portfolio of internationally diversified stocks likely to be lower than the variance...
-
Vanessa Noel, owner and manager of Noel Draperies and Window Treatments, has been receiving some complaints from her loyal clientele of interior decorators and home dcor consultants. For example, one...
-
6. Last year R&G Industries had sales of $270,000, assets of $175,000 (which equals total invested capital), a profit margin of 5.1%, and an equity multiplier of 1.2. The CFO believes that the I...
-
In January 2018, Leon McLeod received a gift of a beach cottage valued at \(\$ 250,000\) from his great-uncle who owned a number of such buildings. The cottage was rented each year to college...
-
How is the cutoff score computed and what role does it play in modeling?
-
Discuss the limitations imposed by the restrictive assumption placed on the discriminant model.
-
Why is R2 not a good measure of fit in a logit model?
-
Carl Cushman, a college professor, age 58, purchased and moved into a house on August 1, 2016. He used the house continuously until September 1 , 2017, on which date he went abroad for a one-year...
-
i need correct answer at any cost otherwise will downvote Question 9 Revisit Later What would be the array immediately after the 7th call to merge() when top-down merge sort is used to sort the...
-
Why is inventory management important for merchandising and manufacturing firms and what are the main tradeoffs for firms in managing their inventory?
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-4. Ivan and Irene paid the following in 2012 (all by check or can otherwise be...
-
Quince Corporation has taxable income of $450,000 for its 2012 calendar tax year. Calculate the corporation's income tax liability for 2012 before tax credits. $_________
-
Karim Depak received a Form 1099-B showing the following stock transactions and basis during 2012: None of the stock is qualified small business stock. Calculate Karim's net capital gain or loss...
-
You are the product manager of Lexcon Fitness and are considering the production of new elliptical trainers. You feel you can sell 5,500 of these per year for 6 years (after which time this project...
-
At present, Global Skateboards Limited is considering expanding its product line to include solar powered skateboards; however, it is questionable how well they will be received by skateboarders....
-
Decathlon Stores is expanding operations with the introduction of a new distribution center. Not only will sales increase but investment in inventory will decline due to increased efficiencies in...
Study smarter with the SolutionInn App