You receive a job offer in the fall of 2021 from Public Co. (Public) a publicly traded

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Question:

You receive a job offer in the fall of 2021 from Public Co. (Public) a publicly traded corporatiion that operates in British Columbia (BC). The job is to promote Public’s products and services to European markets. You accept the offer and start working for Public on January 1, 2022.

Before accepting the position at Public, you live with your one remaining parent in Ontario to help with their care. Your parent passed away in 2020. You inherited your parent’s estate including the house. Your parent’s final income tax return, filed in March 2021, indicated that the fair market value of the house was $525,000. Because you were planning to move to BC to start your new job at Public, and the drop in house prices due to raising interest rates, you list the house for sale in the late fall of 2021 at $450,000. You accept a $390,000 offer for the house in April, 2022 resulting in a $135,000 loss on the house. Public compensated you for one-half of the loss on the sale of your Ontario home. The $67,500 [(1/2)($135,000)] payment was made to you on May 30, 2022.

To help with your move from Ontario to BC, Public offers you the use of a company owned condo for $2,000 a month until you find a house to live in. The condo usually rents for $5,000 a month. You move into the condo on January 1, the day you start your new job.

Pubic gives you a $100,000 interest free housing loan on May 1, 2022. The prescribed interest rate for employee loans for all of 2022 is 2%. You purchase a townhouse near Vancouver on May 1, 2022 for $1,600,000, and use the $100,000 loan to complete renovations so there is a designated area for an office, used to meet clients, and to negotiate contracts. You did not get any receipts for these renovations because you were unable to find a contractor who would invoice and accept cheques. You reluctantly paid cash (under the table) to the contractor. This workspace is 600 square feet of your 2,222 square foot townhouse. When the renovations were complete on July 1, 2022, you moved into the townhouse and started using the workspace immediately.

Early in 2022 Public granted you options to buy 100 Public shares at $100 a share, when shares were trading at $94 a share. Later in the spring when the shares are trading at $123 a share, you purchase 50 shares for $5,000 cash. You still own the shares.

During 2022 you earn a salary of $175,000. This amount includes several bonuses earned for your exceptional sales ability. Public withheld the following amounts from your salary:

Income Taxes $53,000

CPP 3,500

EI 953

RPP Contributions 2,500

Payment for personal use of automobile 1,200

Public matched your RPP contributions and contributed $2,500 on your behalf.

Public provides group medical coverage to all of its employees. The private group medical premiums paid by Public for you cost $1,115 for 2022. One of your colleagues passed away during the year and Public provided you with grief counseling services worth $665.

In 2022, Public gave you two non-cash gifts; a ski holiday worth $1,000 and a $100 restaurant gift certificate.

Public offers all of its employees a 15% corporate discount for ski passes at a nearby ski resort. You buy several ski passes for yourself and your visiting friends using the 15% corporate discount. A detailed statement from Public states you saved $1,050 in 2022 using the discount. Public also gave you a 2022 membership to Luxury Ski Club & Spa for you to take clients to ski, for meals, and drinks. The cost of the annual membership is $5,000. Public paid the entire $22,200 Luxury Ski Club & Spa invoice for meals and drinks.

Public purchased a $120,000 (including GST and PST taxes) 2022 Audi car for you to drive. You use the car throughout 2022 driving a total of 102,000 kilometers, 90,000 km for employment purposes and 12,000 for personal use. Public paid all $23,000 operating and maintenance costs for the Audi.

Your job with Public requires you to meet with international clients at all hours of the day and night. Public gave you a signed T2200 form stating that you are required to pay for certain employment expenses without reimbursement and use a portion of your home for employment purposes. Public gives you an allowance of $400 a month for the 6 months to cover the costs of maintaining the workspace in your townhouse.

You pay the following expenses for your townhouse:

Monthly Maintenance Fee (For 6 Months) $5,400

Hydro (For 6 Months) 450

Property Insurance (6 Months) 575

Property Tax (6 months) 2,600

TV used solely for client entertainment

(promotional videos etc.) 2,600

Office Furniture 5,600

Furniture for client's area 12,400

Required: Determine your Division C (taxable employment income) for 2022. Show all calculations for full and part marks. Articulate your rationale for not including any items into your Division C income.