Your friend Marla works as an appraiser with Tien Co., her start date was January 1, 2020. As an appraiser, Marla is required to drive to properties and appraise their market value. Marla had invited you to the Tien Co.’s 2020 New Year’s Eve party and when she drove you home she asked you to help calculate her tax payable for 2020. Tien Co. (TC) paid Marla an annual gross salary of $80,000, contributed $5,000 to her Registered Pension Plan (which matched her contribution) and withheld the following amounts from her pay: $ 20,000 Income tax $ 900 Employment insurance $ 2,600 Canada Pension Plan $ 5,000 Registered Pension Plan $ 1,500 Appraisal Institute membership dues $ 2,000 Union dues $ 100 United Way Charity Donation Tien Co. provided Marla with a Subaru Outback. Tien Co. purchased the Outback new in 2018 for $48,000 including $3,000 in tax. The Outback’s market value as of January 1st, 2020, is $36,000. Marla drove 54,000kms in total of which 16,000kms were personal use. For the month of July, when she visited her friend Julie, the car was parked at the office. Tien Co. paid all the operating costs. To reduce the automobile benefit she will pay $500 to TC February 1st and April 1st. To help her progress in her career, TC paid $1,000 for a photography course, photos are used in appraisal reports to identify the subject property, comparable properties and support a valuation. TC also paid $500 for a healthy living course for Marla to remain healthy and manage stress to reduce sick days and turnover. To help Marla meet potential clients, TC paid $1,500 for Marla’s squash club membership. On her birthday she received a $300 squash racquet and at Christmas a $200 gift card to Racquets Served Sports Shop. As suggested in her healthy living course, Marla also works out in the gym in TC’s office to which all employees have access. A comparable gym membership would cost $1,000 per year. While working out she injured her ankle. She spent $300 on a walking cast, $2,000 on physiotherapy and $1,000 on massage therapy appointments not covered by her plan. At the New Year’s Eve party, Marla received a $250 brief case in recognition of one-year service, a $750 drone for bringing in the Airport Authority as a client, and a bonus of $4,000 which will be paid January 31st, 2021. To land the Airport Authority as a client she had heavily researched the properties in the vicinity of the airport, mostly in her home office. Marla generally works 7 hours a week from her home office in addition to the 15 hours in the office and 25 hours on the road or with clients at their office. Her rent is $2,000 per month and she uses 120 out of 1,500 square feet for her office. Strata fees which include utilities and insurance cost $250 per month. TC pays $100 per month for her cell phone subscription and approximately 40% of her calls are personal. During her co-op term Marla received options while working for a publicly held Real Estate Investment Fund. The REIT fund shares traded at $10.00 when she received 200 options to purchase them for $11.00. During 2020 she exercised the options when the shares traded at $14 and sold them for $16. Marla had a net capital loss carryover of $3,000 from a past investment in SVU shares. She also had $3,000 in university tuition dues that she had not yet used in her tax returns.

Explanation for tax treatment of items omitted from Net Income for Tax Purposes and/or Taxable Income.

Explanation for tax treatment of specific calculations.

1)Calculate Net Income for Tax Purposes and Taxable Income

2Calculate Federal Tax Payable before Tax Credits

3Calculate Tax Credits and Federal Tax Payable

Answer rating: 100% (QA)

1 Net Income for Tax Purposes Gross Salary 80000 Registered Pensio... View the full answer