Jessee is a marketing representative for a Canadian-controlled private corporation, X Ltd. located in Barrie Ontario. In 2021, the Company relocated her to their Head Office in Richmond, British Columbia Her T4 slip from the employer for the year 2021 relating to her employment showed the following:-

1.

Gross Salary………………………………………………………………………………………$170,000

Payroll deductions:-

Income taxes……………………………………………………$50,000

Canada Pension Plan contributions………………….. 2,749

Employment insurance…………………………………….. 745

Group income protection plan…………………………. 800

Registered Pension Plan……………………………………. 3,000

Union dues………………………………………………………….. 1,400

2. The employer provided Jessee with a list of the following benefits they paid on her behalf in 2021:-

i. An automobile which cost $30,000 plus HST at 13%. The car was available for the entire year and Jessee used the car 40% of the time for employment purposes during 2021. She drove approximately 30,000 kilometres in total during year. The Company also paid all the operating costs for gas, oil, repairs and insurance totaling $3,600.

ii. Annual membership fees at the local golf club $1,200.

iii. When she moved from Ontario to B.C. she sold her house in Ontario in a hurry to move to B.C. and she incurred a loss of $40,000. The Company reimbursed her for the loss on the sale of the home.

iv. Jessee also uses the Company’s swimming pool which is located on the premises. She finds it convenient to go there during the lunch hour for a swim. The cost of using the pool was $700.

v. Preparation of the personal tax return for 2021 was $400.

vi. A trip to the Bahamas worth $1,100. Her husband accompanied her on the trip and the Company paid half of the husband’s expenses totaling $300.

vii. When Jessee and her husband were in the Bahamas they rented the Company’s condo for a 2-week stay for a total of $400 The fair market value of similar rentals in the Bahamas would have cost them $600.

viii. On April 1st.,2021, Jessee borrowed $275,000 from the employer. $250,000 was for the purchase of a new home in B.C. and $25,000 for the purchase of a new car. The loan from the employer was at 1% annually. (The fair market value of interest rates in 2021 were 1st.Qtr. 2%; 2nd. Qtr.3%; 3rd.Qtr. 2% and 4th. Qtr. 4%)

ix. A birthday gift card of $150 from the Bay Company.

x. $2,600 outside financial counselling fees(including HST). The counselling firm indicted that 80% of the fees relate to counselling for future retirement while the remaining 20% of the fees relate to legal fees for a motor vehicle infraction.

xi. In May 2021 Jessee was injured in a motor vehicle accident and was unable to work for 4 months. The insurance company paid her $14,000 under the Group Disability Insurance plan. To date she had paid $4,000 accumulated premiums to the plan.

xii. The Company had paid $5,000 towards a dental bill for Jessee.

Required:-

Compute Jessee’s 2021 employment income following S3 of the ITA. List any omissions from your calculations.

Answer rating: 100% (QA)

Required Compute Jessees 2021 employment income Gross Salary 170000 Payroll deductions Income taxes 50000 Canada Pension Plan contributions 2749 Employment insurance 745 Group income protection plan 8... View the full answer