In 2021, Anita Poirier was transferred by her employer to Vancouver from Toronto. She has made a number of financial transactions related to the move. Anita has asked you for help in determining her 2021 income for tax purposes. She has provided the following information: 1. Anita is divorced and supports her two children Lise (age 17) and Randy (age 19). In the summer, Randy earned net profits of $4,000 as a street vendor. Lise's only source of income was from an investment purchased for her by her mother. The investment, bonds of a Canadian public corporation, paid interest of $1,200 during the year. 2. Anita began work in Vancouver in February 2021 as a senior sales associate for a clothing manufacturer. During the year, she received a gross salary of $133,100 as well as selling commissions of $5,000. In addition, on June 30, her employer's year-end, she was awarded a bonus of $36,000 payable in 12 monthly instalments of $3,000 beginning July 31, 2021. she contributed $4,500 to the company's registered pension plan, and her employer contributed the same amount. She also paid $3,166 to the Canada Pension Plan and made Employment Insurance contributions of $890. 3. Anita's employer has certified that she is required to pay some of her own expenses as part of her selling duties. she incurred the following costs: Purchase of computer Advertising and promotion Entertainment: Meals and drinks Golf club dues automob $3,000 2,200 2,400 2,900 Purchase of computer. Advertising and promotion Entertainment: Meals and drinks Golf club dues Automobile-gas, repairs, and insurance. $3,000 2,200 2,400 2,900 4,200 Anita uses her own car for business activities. At the end of 2020, the car had an undepreciated capital cost of $20,000 (original cost in 2020 - $22,000). In 2021, she drove the car 30,000 km, of which approximately 16,000 Km was for personal use. she acquired a computer (see table), which she uses at home to maintain customer files and industry information. She estimates that 90% of her computer time is employment related. 4. On January 15, 2022, Anita contributed $8,500 to an RRSP. On the same date she contributed $4,800 to a TFSA. For the 2020 taxation year, her earned income was $63,889. In 2020, the combined (employer and employee) contribution to her employer RPP was $6,600. 5. Anita drove herself and her two children from Toronto to Vancouver. The 4,400-Km trip took five days and cost $400 for gasoline, $480 for accommodation (four nights), and $500 for meals for five days. As well, she incurred the following relocation costs: Real estate commission on sale of former home Moving furniture Legal fees to purchase new home Legal fees on sale of former home Temporary lodging and meals, in Toronto after the sale $ 23,000 16,900 2,000 2,500 of the former home and in Vancouver before taking possession of the new home (20 days) Her employer, in accordance with company policy, paid her $12,000 as a partial reimbursement for transporting furniture to Vancouver. 6,000 6. Anita wrote an article on selling strategies in the fashion industry. It was published in a national trade journal and received wide acclaim. In September, she was awarded a $2,200 prize for having written the journal's best article of the year. 7. In January, Anita sold her home in Toronto for $300,000. She had acquired the home in 2018 for $250,000 and had occupied it until the moun 8. Five years ago, Anita purchased 5% of the common shares of Prentice Ltd. for $20,000. Prentice is a Canadian-controlled private corporation manufacturing specialized furniture. In June 2018, when the company had cash-flow problems, Anita lent Prentice $10,000. The loan was unsecured and payable on demand. Although Anita has received no interest to date, in 2019 and 2020, she included in her taxable income interest of $1,500 ($750 x 2 y = $1,500) based on the agreed interest rate on each anniversary date. In 2021, she demanded payment of the loan and accrued interest, but the company was unable to pay. The company's only assets, other than the leased manufacturing equipment, were inventory and receivables, which were pledged on a bank loan; these were insufficient to meet even that obligation. In March 2022, Prentice closed operations and declared bankruptcy. 9. Anita sold the following properties: 4,000 shares of Teulon Ltd. (a public corporation) oil painting. Commodity futures contract Original cost $21,000 800 16,000 Selling price net of disposal costa $114,000 $ 6,000 33,900 The sale of the commodity futures contract was Anita's second commodity transaction. In 2019, she purchased and sold a similar contract but lost $14,000. She deducted the full $14,000 when computing her 2019 taxable income. 10. Anita owns a residential rental property in Toronto. She acquired the property in 2020 for $414,000 (land - $54,000, building - $360,000). She incurred a substantial loss in 2020 as a result of an unexpected vacancy. She found a new tenant in 2021. She received gross rents of $48,000. Expenses for utilities, taxes, insurance, interest, and maintenance were $47,100 that year. One of the tenants failed to pay their December 2021 rent of $2,000. However, she received that payment on January 20, 2022. 11. Anita received the following additional amounts: Eligible dividends from taxable Canadian public corporations Interest on bank deposits Winnings from a provincial lottery $7,300 8,500 800 12. Anita hired an investment counsellor. On his recommendation, she used $40,000 of the $200,000 mortgage loan on her new home to acquire Canadian public securities. Her mortgage interest payments totalled $22,000. She paid the investment counsellor $2,200 for his advice. 13. Anita made donations of $4,000 to registered charities. 14. During 2021, Anita's 2019 tax return was reassessed. She hired a lawyer to prepare an appeal. The legal fee was $1,400. The appeal was not successful. Required: For the 2021 taxation year, calculate Anita's net income for tax purposes. Prepare the calculation in accordance with the net income formula, and organize the items of income by the categories described in that formula. A Salary Commissions Bonus Registered Pension Plan Car CCA Expenses Restricted to Commission Income Advertising Car Operating expenses Entertainment Sales Expenses allowed Net Employment income Business income: Property Income Canadian dividends Bad Debt Expense Bank Interest Income Interest expense on mortgage Interest Income on gift to Daughter Investment counselor fee Rent expenses Rent receivable Rental Building CCA Rent received Net Property Income Other Income $ $ $ $ $ $ 133,100 5,000 18,000 (4,500) (2,200) 8,500 $ 8,500 B Taxable capital gains and Allowable capital losses Taxable capital gain - LPP - Painting Taxable capital gain - principle residence Taxable capital gain - Teulon shares Net Taxable Capital Gains sub total C Other Deductions CPP enhanced contributions Legal Expense: Tax appeal RRSP Deduction Moving Expenses Moving furniture Moving Legal fees on sale of former home Moving Legal fees to purchase new home Moving Meals & vehicle (simplified Method) Moving Real estate commission Moving reimbursement Moving Temporary lodging and meals in Vancouver & Toronto Moving Temporary lodging and meals on trip Net Moving Expenses Net Income for Tax purposes (2,500) (2,000) $ SA 0 0 (4,500) 4,000