Miriam, the sole tax adviser of a financial planning firm, is contemplating an offer to become Director of Taxation of Neil Manufacturing Limited (NML) of Dundas, Ontario. The offered compensation package would include the following: a salary of $132,000 per year, payable monthly; a one-time flat allowance of $25,000, payable on acceptance of the position, to help move her and her family to Dundas; a company contribution of 6% of her salary to a defined-benefit registered pension plan; company payment of the premiums for extended health coverage and a dental plan provided by Star Insurance; company payment, valued at $900, for the preparation of her tax return by the company's accountants; company payment, valued at $2,500, for her membership in the Dundas Valley Golf and Curling Club; a company loan of $200,000 to help finance the purchase of a new home in Dundas. The loan will bear interest at 3.5% per year payable monthly and will be made on May 1, 2008, the closing date on the purchase of the home. REQUIRED Miriam does not deal with many employment-related tax issues and recognizes the need for a corroborating opinion on the tax consequences of this compensation package. She has asked you for your opinion. Comment on the income tax consequences for employment income of each item in the compensation package. Assume that the prescribed rate of interest for employee loans is 7% in the first quarter of the year, 6% in the second quarter, 4% in the third quarter and 7% in the fourth quarter. Ignore the leap-year effects