Maya is an employee of Maple Farms Inc. and on September 20, 2021 the company granted her
Question:
Maya is an employee of Maple Farms Inc. and on September 20, 2021 the company granted her two loans with details as follows:
$35,000 to purchase a home in Langley, BC (her previous home was in New York)
$21,000 to purchase a vehicle which she will be required to use exclusively for employment purposes. She is eligible to claim vehicle deductions under s8 of the Income Tax Act.
Interest was payable on the loans at a rate of 2% per annum and Maya paid this interest in full on December 30, 2021. Assume the prescribed rates for 2021 are as follows and show all calculations for full marks:
o 1st quarter:
6%
o 2nd quarter: 7%
o 3rd quarter: 5%
o 4th quarter: 8%
a) What is the effect of these loans on Maya's NITP and Taxable income for 2021?
b) What would be the actual prescribed interest rate used to calculate an employee loan for the 2nd quarter of 2009? What is the citation?
Expert Answer:
a Assuming that Mayas NITP for 2021 is 30000 the effect of the loans on her NITP and taxable income ... View the full answer
