Riley Fontaine has requested that you review the calculation of his 20X1 net income for tax purposes. He has provided you with the following information:
1. His salary consists of the following:

The bonus of $6,000 was awarded to him on December 31, 20X1, and was paid on
January 15, 20X2.
2.His employer deducted the following items from his salary and remitted them to the appropriate party on his behalf:

3. Fontaine is employed by Remco, a Canadian public corporation. Two years ago, Remco granted Fontaine an option to purchase 1,000 of its common shares at $16 per share. At the time the option was granted, Remco€™s shares were trading at the same value of $16 per share. On January 31, 20X1, Fontaine purchased 1,000 shares of Remco (trading value at purchase date€”$22 per share). On November 30, 20X1, he sold all of the shares at $24.
4. Remco requires that Fontaine work out of his home from time to time. Remco has supplied him with a computer and modem for this purpose; however, Fontaine must pay for his own supplies. His house is 2,000 square feet and his workstation is a room of about 200 square feet. He also uses the room as a den and guest room. Utility costs for his home for 20X1 amounted to $1,200.
5. Fontaine travels out of town from time to time to his employer€™s manufacturing plant. Remco reimburses him for all travel costs, except meal costs. The plant is only 90 km from the head office, and he always returns home the same day after working a normal eight-hour day.
6. Fontaine has calculated his net income for tax purposes as follows:

Required:
Advise Fontaine whether his calculation of 20X1 net income for tax purposes is correct. If it is not, recalculate a revised 20X1 net income for tax purposes, and briefly explain the changes you made.

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Basic salary Bonus $92,000 6,000 $98.000 Canada Pension Plan Employment Insurance premiums Registered pension plan Income tax Charitable donations (United Way) S2.426 914 4,400 26,000 3,500 Employment income Salary and bonus S98,000 Deductions Registered pension plan Employment expenses 4,400 Meal costs while out of town: $300 50% 150 Office at home Minor repairs Utilities (200/2,000 x S1,200) Office supplies and stationery Computer software (word processor) 340 120 410 220 92,360 Capital gains Remco shares) Selling price (1,000 x S24) Cost (1,000 x S16) $24,000 16,000 8000 Gain Taxable (1/2 of S8,000) 4,000 Net income $96.360