Abra Swan is 30 years old and single. She is employed as a middle-level manager with a national Canadian company. After living and working for five years in Regina, Saskatchewan, she was transferred to her employer’s office in Winnipeg on December 15, 20X1.

Her financial transactions for the 20X1 taxation year are shown below.

1. Swan received an annual salary of $50,000, but her take-home pay for the year was only $34,660 (see below).

Gross salary     ………………………………………………….         $50,000

Amounts withheld by employer:        

Income tax                  …………………………………………         (10,000)

Company pension contribution ………………………………… (2,000)

Canada Pension Plan  ……………………………………………      (2,426)

Employment Insurance ……………………………………………      (914)

         ……………………………………………………………               $34,660

2. During the current year, Swan purchased 1,000 shares of her employer’s company (a public corporation) under a stock-option program. The shares cost $10 each and at the time of purchase had a market value of $14 per share. When the stock option was granted two years ago, the share price was $11.To fund the purchase, she borrowed $10,000 from her bank. During the year, she paid interest of $800 on the loan.

3. The previous year, Swan had unwisely invested in commodity futures and lost a large portion of her savings. She considered this loss to be a business loss but was unable to use the full amount for tax purposes because her other income was not sufficient. Of the total loss, $6,000 was unused.

4. As well, Swan had the following receipts for 20X1:

Dividends from taxable Canadian corporations (Eligible)………...	$ 4,000
Dividends of $2,000 from a foreign corporation, ………...
less foreign taxes of $200………...	1,800
Cash received from RRSP withdrawal used to purchase home….	25,000
Proceeds from the sale of public corporation shares
(originally purchased for $20,000) …………………	26,000

5.      In 20X1, she made the following disbursements:

Winnipeg home down payment (first home)…………….	$60,000
Mortgage payments on her new home …………….…………….	1,000
Life insurance …………….…………….…………….	400
Charitable donations …………….…………….…………….	800
Contribution to a federal political party …………….…………….	800
Tuition fees to a university (one-day course) …………….	300

Required:

For the 20X1 taxation year, determine Swan’s

a) Net income for tax purposes;

b) Taxable income; and

c) Federal tax liability.

To which province will Swan pay provincial tax?