Employment Information

Jeremy is 45 years old and works for a large Canadian public company. His salary is $98,000, none of which involves commissions. His employer withholds the following amounts during 2020:

Registered Pension Plan Contributions (Note 1) $4,200

Employment insurance premiums 856

CPP Contributions 2,898

Contributions to The Canadian Cancer Society (Note 2) 3,200

Note 1 - Jeremy's employer makes a matching contribution of $4,200.

Note 2 - The Canadian Cancer Society is a registered Canadian charity.

Jeremy is required to travel extensively by his employer. He uses his own automobile for this travel. His current automobile was acquired on January 1, 2020 at a cost of $42,000. During 2020, the automobile is driven 32,000 kilometers, 25,600 of which were employment related. Operating costs for the year totaled $4,900. This amount does not include CCA and interest on his automobile.

In addition to his automobile costs, his other 2020 travel costs were as follows:

Hotels $2,700

Food While Travelling for Employer 1,800

His employer provided him with an interest free loan of $20,000 to assist in the car purchase. None of this loan will be repaid until 2021. Assume that the relevant prescribed rate of interest throughout 2020 was 1 percent.

In addition, his employer provides him with the following allowances for his travel:

Hotels and Food $4,800

Use of Personal Automobile ($100 Per Week) 5,200

Investment Information

Early in 2020, Jeremy's father died of cancer and left him a very large inheritance which Christopher invested to create a substantial investment portfolio. Jeremy paid off his mortgage on September 25, 2020 with funds from his inheritance. On October 1, 2020, he used his house as collateral for a new $200,000 mortgage at the same 2.5 percent per annum rate. He immediately invested the funds in shares of Canadian public companies.

The 2020 results for his investments are as follows:

Eligible dividends - During the year he receives $23,000 in eligible dividends from his holdings of Canadian public companies.

Non-Eligible- Jeremy received non-eligible dividends of $15,000 during the year.

Mutual Fund Trusts - During the year, Jeremy's holdings of mutual fund trusts distribute a total of $34,250. The breakdown of these distributions is as follows:

Capital Gains $20,000

Eligible Dividends 9,000

Interest Income 5,250

Total $34,250

Jeremy had $5,000 of non-capital loss carryover from others and $15,000 of net Capital loss of other years.

Required:

A. Determine Jeremy's 2020 Net Income for Tax Purposes

B. Determine Jeremy's 2020 Taxable Income

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