Jerry Farrow is employed by a Canadian controlled private corporation In 2018, he was granted options...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Jerry Farrow is employed by a Canadian controlled private corporation In 2018, he was granted options to acquire 625 of his employer's shares at $92 per share. At that time, it was estimated that the fair market value of the shares was $90. In 2019, when the estimiated fair market value of the shares is $95 per share, he exercises all of these options. In 2020, he sells 125 of the shares for $85 per share. Indicate the tax consequences of the events in 2018, 2019, and 2020 on Mr. Farrow's Net Income For Tax Purposes and on his Taxable Income. Where relevant, identity these effects separately. 5 poin QUESTION 2 Deborah Ekert is employed as a salesperson and receives some of her compensation in the form of commissions. During the curent year, her salary totaled S85,000 and her commissions totaled $8.400. Her employment related expenses during this period were as follown Capital Cost Allowance On Car Interest On Car Loan Traveling Expenses Promotion And Advertising Chent Entertainment (1/2)(Actual Costs OF $5.200) Total Avalable eductions $2,850 1,075 10,300 5,600 2.600 $22 425 *The car is uned exclunively for employment related activities. Ms. Ekert meets the conditions for deducting employment income expenses. Grven the proceding information, determine Ms. Ekart's minimum net emolovment income for the current yoar. Explain your conciusions Jerry Farrow is employed by a Canadian controlled private corporation In 2018, he was granted options to acquire 625 of his employer's shares at $92 per share. At that time, it was estimated that the fair market value of the shares was $90. In 2019, when the estimiated fair market value of the shares is $95 per share, he exercises all of these options. In 2020, he sells 125 of the shares for $85 per share. Indicate the tax consequences of the events in 2018, 2019, and 2020 on Mr. Farrow's Net Income For Tax Purposes and on his Taxable Income. Where relevant, identity these effects separately. 5 poin QUESTION 2 Deborah Ekert is employed as a salesperson and receives some of her compensation in the form of commissions. During the curent year, her salary totaled S85,000 and her commissions totaled $8.400. Her employment related expenses during this period were as follown Capital Cost Allowance On Car Interest On Car Loan Traveling Expenses Promotion And Advertising Chent Entertainment (1/2)(Actual Costs OF $5.200) Total Avalable eductions $2,850 1,075 10,300 5,600 2.600 $22 425 *The car is uned exclunively for employment related activities. Ms. Ekert meets the conditions for deducting employment income expenses. Grven the proceding information, determine Ms. Ekart's minimum net emolovment income for the current yoar. Explain your conciusions
Expert Answer:
Answer rating: 100% (QA)
Question 1 A When options were granted Grant of the options in 2018 doesnt affect Net Income For Tax Purposes orTaxable Income B When options were exc... View the full answer
Related Book For
Canadian Income Taxation planning and decision making
ISBN: 9781259094330
17th edition 2014-2015 version
Authors: Joan Kitunen, William Buckwold
Posted Date:
Students also viewed these finance questions
-
Pasqual Melo is employed by a public corporation. On January 1, 2019, she was given an option to purchase 1,000 shares of the public corporation for $8 per share (the option extended for two years)....
-
A Canadian controlled private corporation has a Net income for tax purposes of $478,000 and a Taxable Income of $420,000. All of this income is Active Business Income and is earned in Canada and...
-
Q4 MNO Ltd. Is a canadian controlled private corporation that sells motors. It owns 60% of the outstanding shares of PQR Ltd. During the year PQR declared and paid an ineligible dividend of $100,000...
-
33. Monker Dining Room Furniture manufactures two models of dining table sets: Traditional brand Contemporary. Manufacturing requirements are as follows: um boxi mod sq to get YTO TRADITIONAL...
-
A time series exhibits the pattern stated below. Indicate the type of time-series component described. a. The pattern is wavelike with a recurrence period of nine months. b. The time series is...
-
Loveless Corporation had the following 2022 income statement. Revenues ............. $100,000 Expenses .................. 60,000 ............................... $ 40,000 In 2022, Loveless had the...
-
\(\left(b^{6} ight)^{11}\) Simplify the expression.
-
Elizabeth Bailey is the owner and general manager of Princess Brides, which provides a wedding planning service in Southwest Louisiana. She uses radio advertising to market her business. Two types of...
-
plzhelp Inland Fisheries Corp. anticipates cash flows from operating activities of \( \$ 10 \) million in \( 20 \times X \). It will need to spend \( \$ 6.5 \) million on capital investments in order...
-
A company wishes to create a trust fund through a savings plan with either annual or monthly deposits under an APR of 5% over 30 years. During that time, the company has the following cash flows: a...
-
She's No Longer with the Company ... If you are an HR generalist for a large clothing retail store, what policy could you put in place to help reduce your company's exposure to tort suits by former...
-
es A manufactured product has the following information for August. Direct materials Direct labor Overhead Units manufactured Total manufacturing costs Standard Quantity and Cost 2 pounds per unit...
-
What are some risk factors associated with intimate abuse of the elderly? What risk factors did Marjorie display? Did Marjorie's case display any warning signs of abuse or neglect? Please provide...
-
A specific honey fungus measuring 2.4 miles (3.8 km) across inthe Blue Mountains in Oregon is thought to be the largest livingorganism on Earth. These fungi belongs tothe Armillaria genus, which is...
-
The system shown in the schematic represents a model two-story building: Take m = 1 104 kg, m = 3 104 kg, k = 4 105 N/m, k = 2 105 N/m a) Derive the equations of motion of the system and represent...
-
On January 1, 20X5, John Co. invested in Mary Ltd as an associated company by purchasing 25% of the outstanding shares of Mary at a cost of $275,000. Both firms have a fiscal year-end of December 31....
-
Myway Company vendi equipos a una empresa canadiense por 100000 dlares canadienses (C$) el 1 de enero de 20X9, con unaliquidacin en 60 das. En la misma fecha, Alman celebr uncontrato a pl 0 answers
-
Find the inverse, if it exists, for the matrix. -1
-
When a corporation sells its business by disposing of its business assets, the amount of tax to the corporation resulting from the sale can be determined with relative certainty. Does the same degree...
-
In what circumstances may an individual be subject to provincial tax in more than one province in a particular year?
-
An investor acquired a residential high-rise apartment as an investment. The property has now been owned for 11 years and annually has provided reasonable net rental income. This net rental income...
-
1. ETHICS Suppose you were on a state supreme court and faced with a restaurant- choking case. Should you require restaurant employees to know and employ the Heimlich maneuver to assist a choking...
-
Question: When Hiller Systems, Inc., was performing a safety inspection on board the M/V Cape Diamond, an ocean-going vessel, an accident killed two men. The Occupational Safety and Health...
-
2. YOU BE THE JUDGE WRITING PROBLEM An off-duty, out-of-uniform police officer and his son purchased some food from a 7-Eleven store and were still in the parking lot when a carload of teenagers...
Study smarter with the SolutionInn App