Question: Mrs Walker, a computer consultant, did some work for Micro Inc. The agreed fee or her work was $12,000. Her husband is out of work;

Mrs Walker, a computer consultant, did some work for Micro Inc. The agreed fee or her work was $12,000. Her husband is out of work; therefore she invoiced Micro Inc, and asked that it make the cheque payable to her husband. Mrs. Walker plans to have the $12,000 reported on her husband's tax return.

Required:

Discuss how the CRA would treat this $12,000 item. Why? What are the tax consequences.

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