AP 4-8 (Comprehensive Federal Income Tax Payable) Ezra Pinnock is 73 years old and is an engineering professor at a major Canadian university. He is in good health and lives in Toronto in a large house he inherited from his mother. Employment Information 1. Ezra's gross salary for 2023 was $163,000. As the result of negotiations by his union, he was entitled to receive an additional $8,000 in salary related to his employment in 2023 . However, this adjustment will not be paid to him until January 2024. 2. In 2023, Ezra's employer deducted El contributions of $1,002. Because of his age and the fact that he is collecting CPP benefits, Ezra no longer has to make CPP contributions. 3. Ezra's employer sponsors an employee pension plan that qualifies as an RPP. Because Ezra no longer contributes to this plan, when he reached age 69 he was required to start withdrawals from the RPP. In 2023, he received $26,000 of pension income from the plan. 4. As much of Ezra's employment involves distance education, he is required by his employer to maintain an office in his home. This home office occupies 18% of the space in his residence and is viewed as his principal place of business. The 2023 expenses associated with this residence are as follows: 5. Ezra is one of his university's most prestigious professors, and he does an extensive amount of travel promoting the university's programs. All of the travel is incurred while he is away from his employer's place of business for at least 24 consecutive hours. According to his employment contract, he is required to pay his own travel expenses. He receives a flat rate monthly allowance of $1,000 to cover his travel expenses. The actual travel expenses for 2023 were as follows: In addition to these expenses, Ezra used his own automobile, which he purchased many years ago for some of the travel. In 2023, he drove 32,000 kilometres, with 16,000 of these related to his travel for the university and the remaining 16,000 for personal use. Operating expenses for the year totalled $3,200. His accountant has advised him that CCA on the automobile for the year ( 100% basis) would be $4,500. Ezra received no allowance for the use of his automobile. 6. In 2023, having accumulated 10 years of service with his current employer, Ezra received a cash award of $350 and a very fancy plaque. In addition, all university employees receive a basket of gourmet food at Christmas. The value of this basket is $325. 7. The university provides Ezra with $500,000 in life insurance coverage, as well as a supplemental accident and sickness insurance plan. The 2023 cost to the university for the life insurance coverage was $675, while the cost for the accident and sickness plan was $472. The accident and sickness plan would pay cash benefits due to injury or illness, but it would not pay periodic benefits to replace salary if Ezra were unable to work. Ezra does not contribute to the payments for the accident and sickness plan. 8. After he was injured in an accident, Ezra received benefits under the accident and sickness plan of $1,245 in 2023. Other Income Having worked for another university prior to joining his present employer, Ezra had 2023 income from RPPs sponsored by this university of $35,000. In addition, he receives CPP benefits of $13,000. Since he knows his income will remain quite high for the foreseeable future, Ezra has not applied for OAS. Personal Information 1. Ezra has been married to Laurie Pinnock for over 40 years. Laurie is 64 years old and, because of a terrible skiing accident three years ago, she is sufficiently disabled that she qualifies for the disability tax credit. Her net income in 2023 is $8,420, which includes $2,500 of pension income from an RPP. 2. Ezra and Laurie have a 25-year-old son named Martin. He is currently unemployed and lives at home with his parents. His only income is $3,400 in El benefits. 3. Laurie's father, Ezekial, is 92 years old. He lives in Ezra and Laurie's basement in-law suite, along with his 77-year-old common-law partner, Brenda. Ezekial has a physical infirmity and has income from various sources of $17,300. Brenda is in good health, but she had no income in 2023. She moved to Canada five years ago, so she is not eligible for OAS. 4. In 2023 , Ezra spent $11,400 for home modifications required to deal with the mobility restrictions caused by Laurie's disability. Since Ezekial has very poor night vision, Ezra also spent $1,200 on installing motion-activated external lights for Ezekial's safety. 5. In 2023, the family had medical expenses, all of which were paid for by Ezra, as follows: 6. In 2023 , Laurie wins $200,000 in a lottery. She donates cash of $50,000 to the Safe Skiing Research Fund, a registered Canadian charity. Laurie has been a regular donor since her accident. Required: For 2023, calculate Ezra's minimum: 1. net income, 2. taxable income, 3. federal income tax payable. In determining these amounts, ignore GST/HST \& PST considerations and the possibility of pension income splitting