Anita Flare is a skilled tool and die worker. She has been working for Car Parts Inc., a large manufacturer of parts for the automobile industry for over 10 years. Car Parts Inc. is a Canadian-controlled private corporation. Anita has become their "Jane on the Spot" as far as diagnosing and quickly retooling machinery that breaks down or needs to be updated to run a short order. Anita is single and she rents a home in north Toronto. Because Anita is required to travel for 75% of the year, Car Parts Inc. actually pays the $1,200 monthly rent on Anita's home in Toronto. Anita reimburses the company for 25% of this amount ($300 per month) through payroll deduction as set out below.

The head office of Car Parts Inc. is located in north Toronto. The company, however, has plants that are located throughout Ontario and Quebec, wherever there are large automobile manufacturing operations to be supplied with parts. When a plant requires emergency retooling or repair Anita is sent out to that location to supervise and organize the work. As stated above, this involves about 75% of Anita's total employment hours for any given year. She stays at a particular location for a period of days or weeks depending on the nature of the job involved. She is never at a site for less than 36 hours. For the balance of the year, Anita works at the head office in the research department.

Anita's final 2008 pay stub showed the following totals in respect of the 2008 taxation year.

Anitas final 2005 pay stub showed the following totals in respect of the 2005 taxation year.Gross salary........................................................$115,000

Payroll deductions:

Income tax withheld....................................$44,200

Canada Pension Plan contributions.............2480

Employment Insurance premiums paid.......931

Contributions to company group RRSP......1,750

RPP contributions on account of currentservice (matched by company)............5,000

Union dues to Canadian Union ofAutomobile Workers (GST exempt)....800

Group accident income protection 240

monthyl rent reimbursment 3600

In discussion with Anita you determined that the company also provides the following fringe benefits.

Anita was injured on the job early in the year and received total payments of $11,500 out of the company group income protection plan for 2 months while she was recuperating. She had not previously received any payments under this plan and has paid total premiums of $2,880 into the plan since she began employment 12 years ago (this includes all of the year 2008 premiums paid through December2008).

Due to her extensive travel, Anita's employer requires her to have an automobile for employment purposes. Anita has provided you with the following details of her automobile expenses.

NOTES:

⁽¹⁾She owned an automobile until August 31, 2008, at which time she disposed of that vehicle and began leasing a new one. Assume that there are no tax consequences to Anita of the disposition of the automobile other than the fact that she can claim CCA in 2008 on this vehicle, as set out above, since it was a luxury vehicle.

Anita received an automobile loan to purchase the owned automobile. She received the loan on April 1, 2003, for $40,000 but has been making principal repayments annually on April 1 each year. She made the last principal repayment of $8,000 on April 1, 2008. There was no interest payable on the loan. Assume that the prescribed interest rate for employee loans was 6% for all of 2008.

Anita drove the owned car a total of 40,000 km during 2008 of which 35,000 km was employment related.

⁽²⁾Anita leased the car as of September 1, 2008, at a cost of $920 a month that includes PST and GST. The lease is for a 3-year period that will expire August 31, 2011. At the time that she leased the car, the manufacturer's list price on the vehicle was $55,000 excluding all taxes.

Anita drove the leased car a total of 20,000 km during 2008 of which 18,000 km was employment related.

REQUIRED

(A) Determine Anita Flare's income from employment under Subdivision a of Division B of the Act for 2008 and cross-reference your answer to the appropriate section of the Act and/or Interpretation Bulletin. Round your answer to the nearest dollar.

(B) Indicate why you did not include any of the above amounts in your answer with the appropriate cross-reference.

(C) Compute the GST rebate that should be claimed and the income tax consequences of the rebate to be received in 2009.

Ignore the leap-year effects.