Ima Flogger has been a salesperson employed by Floggem Sales Ltd. since early in 2016. The corporation, which sells tax reference materials, is a Canadian-controlled private corporation, based in Dundas, Ontario. Ms. Flogger's sales territory is southwestern Ontario and she is required to travel regularly within that territory.

Ms. Flogger has requested your help in the preparation of her 2019 tax return. She has provided you with the following information about her receipts and selected disbursements.

Receipts and Fringe Benefits

(a) Her salary was $72,000 and her commissions were $20,000.

(b) Her employer paid the following amounts on her behalf:

Canada Pension Plan premium	$2,749
Employment Insurance premium	1,204
Extended health care Great West Life	1,450
Dental plan premium Manulife Financial	1,385
Employers health tax levy	1,500
Group term life insurance premium	1,080
Workers Compensation	1,135
Registered Pension Plan defined benefit	7,000

The group term life insurance policy was for $250,000 of insurance coverage. Ms. Flogger's portion of the premium was withheld through payroll deductions, as indicated in item (j), below.

(c) When she joined the company in 2016, Ms. Flogger was provided with a car, which was available to her throughout 2019. The car had cost $36,800, including HST of 13% in 2016. Its fair market value in 2019 was $15,500. Its net book value after depreciation for tax purposes was $12,495, assuming the company is an HST registrant. She used the car in 2019 for employment purposes 72% of the time and drove a total of 30,000 kilometres during the year. Her employer paid the insurance costs of $3,000 and the license of $150.

(d) Ms. Floggers employer paid the following allowances for the year in equal monthly instalments:

Meals, entertainment, and accommodation	$15,000
Car	4,200
Clothing	540

(e) To help her develop and maintain her clientele for her employer, the corporation paid $3,000 for Ms. Floggers membership at the Dundas Golf and Curling Club.

(f) Ms. Flogger was permitted to participate in the corporation's stock option plan. In 2019, she was granted an option to purchase 2,000 shares at $12 per share. At that time, the shares were valued at that amount. She exercised her option to buy 500 shares in 2019 at a time when they were valued at $15 per share.

(g) The corporation provided Ms. Flogger with a loan of $6,000, on August 1, 2019, to buy the shares. The loan agreement required the payment of monthly interest at 1% per annum. The principal was payable in four annual instalments due on the anniversary date of the loan. The prescribed rates of interest for 2019 were: 3% in the first quarter, 3% in the second quarter, 4% in the third quarter, and 3% in the fourth quarter.

(h) Corporate policy allowed Ms. Flogger to purchase her employer's products for her personal use at a 20% discount from selling price. During the year, she purchased $1,000, at selling price before the discount, of products for her sister who was setting up a law practice.

(i) In 2019, Ms. Flogger received an HST rebate of $980, based on the deductions she claimed on her 2018 tax return, which was filed in April 2019.

Payroll Deductions and Selected Disbursements

(j) Payroll deductions were as follows:

Income tax withheld	$15,000
Registered Pension Plan defined benefit	7,000
Canada Pension Plan premium	2,749
Employment Insurance premium	860
United Way donation to registered charity	600
Reimbursement for use of company car	900
Group long-term disability insurance premium	675
Group term life insurance premium	400

(k) Her reasonable travel costs amounted to the following, which include HST:

Meals	$7,600
Entertainment	4,000
Accommodation	10,000
Car gas and oil	5,900
maintenance	2,000

(l) In 2019, Ms. Flogger paid legal fees of $1,500, including HST, to recover unpaid salary from her former employer, which she left in 2016.

(m) She paid membership dues of $350, including HST, for membership in the Canadian Association of Professional Salespersons.

(n) Ms. Flogger paid $250, including HST, in fees to you, her accountant, for preparing her 2018 tax return and for counselling her on tax matters.

(o) She paid $300, including HST, to a community college for a course on personal motivation to help her in her career.

(p) Ms. Flogger purchased $750 in clothing to maintain her wardrobe at professional standards for her job.

Required:

(a) Determine Ima Flogger's employment income for tax purposes for 2019. Show all calculations whether or not necessary to the final answer. (25 Marks)

(b) Indicate why you did not include any of the above amounts in your answer. (5 Marks)