Cover sheet - please read Q1 Question 2: Net Income For Tax Purposes (22 marks) Do not add or delete any lines! Req Answer SPACE FOR CALCULATIONS IF REQUIRED. Enter the impact on Taylor's net income for tax purposes in the blue boxes. If there is no impact, leave the box blank. 1 Taylor works for a large Canadian public pharmaceutical company (KKM) and earns a salary of $199,000. He also earned a bonus of $40,000 in 2020. At December 31, 2020 $25,000 of the bonus had been paid. 2 Taylor's employer withheld the following amounts from her income: Income Taxes 45,000 mk CPP 2,898 EL 856 Registered Pension Plan (RPP) Contributions 2,700 Professional membership dues 1,200 1 mk Taylor's company contributed $2,700 on her behalf to the Company's RPP. 1 mk 4 KKM provides life insurance coverage to all of its employees. The premiums paid by KKM on Taylor's behalf cost $450 for the year. 1 mk 5 On January 15, 2020 Taylor was granted options to buy 2.500 shares at a price of $15.00 per share. At this time the shares are trading at $16.00 per share. Taylor exercises all of the options when the shares are trading 1 mk at $17.50 on July 15th. In September, the share price spikes and Taylor sells all his shares for $19.25 per share 1 mk 6 Taylor holds other investments: 1 mk . His shares in Bob's Telephone Co. pay $2,600 eligible dividends. His shares in Orange Tech Co. pay $5,100 non-eligible dividends. 1 mk He purchased a $90,000, 4%, term deposit on April 1. 2019. This four-year term deposit will pay interest upon maturity. 1 mk Record each of the investment impacts on income, if any, on a separate line. Taylor borrowed from his line of credit to purchase these investments. The interest on his line of credit was $1,945 in 2020. 1 mk Taylor has owned a residential rental property since 2014. The beginning UCC is $192,500 Rents for the year total $36,000, while rental expenses are shown below I mk Mortgage Payments (interest is $12,000 $19,000 Enter amount of 1 mk Utilities 5,300 expense that can 1 mk be deducted in the Property tax .300 blue answer box. 1 mk Repairs and Maintenance 3,000 I mk Net rental income before CCA 1 mk Less Capital Cost Allowance 1 mk Net rental income after CCA 1 mk Taylor also operates a successful business doing small. Enter the amount of Revenue and Expenses in the blue boxes that are to be included in the net income Revenue: This year Taylor earned $20,000 which includes $3,000 accounts receivable 1 mk 1 mk Expenses: Accounting and Legal (includes $500 of personal legal costs not business related) 1,800 1 mk Advertising and promotion 320 1 mk Automobile expenses (for the 30,000 total km driven, 9,000 km are for business) 1,700 1 mk ad debts (based on review of the re 450 Depreciation (ending UCC from prior year for these class 8 assets is $5,000) 2,000 urance (includes life insurance of $450 required by the bank for business loan) 1,300 Interest on the bank loan 1,920 Meals and Entertainment (entertaining potential clients usually dinner) 850 Office expenses Capital cost allowance (ending UCC from prior yr is $5000, class 8 assets) Total expenses
