Ms. Amelia Delaney is a certified massage therapist with a rapidly growing clientele. While her previous employer had taught her a great deal, he was unable to provide her with the flexibility and salary she deserved for her level of technical skill. Thus, she decided to take a position with Healthy You Inc. (HYI), a Canadian controlled private corporation located in Dartmouth, NS. On July 1, 2021, she relocated the 200 kilometers to Dartmouth and immediately began working for HYI. The compensation package offered to Amelia included a salary of $90,000 per year, a one-time bonus of $10,000 (half to be paid on July 1, 2021 and the other half to be paid on January 1, 2022) and employee stock options to purchase 200 shares of the company for $18 per share, as well as other benefits. The stock options and benefits package are available to all employees. The fair market value of the shares on the date of the offer was $18 per share. Amelia is expected to regularly meet with clients in her home. Since she would like to maintain a certain level of privacy for her clients, she decided to purchase a home instead of renting an apartment. Since she had not yet sold her old home in Barronsfield, NS, the company decided to provide her with a tenyear, interest free loan to cover the down payment of $50,000 on her new home. The prescribed rate of interest at the time the loan was provided (July 1, 2021) was 3% and increased to 3.5% on November 1, 2021. All of this was completed just prior to her move and the house was ready for her arrival on July 1. Amelia is responsible for purchasing her own supplies for employment purposes. The company will provide her with Form T2200 each year stating that she is required to pay for certain employment expenses without reimbursement and to confirm that she is required to use a of portion of her home for employment purposes.

Other Information:

1. HYI provided Amelia with an allowance of $3,000 to cover expenses related to the renovation of one of the rooms in her home for the purpose of providing massage therapy to clients. Her actual expenses were as follows:

Paint $ 200

Window coverings 600

Table coverings/towels 800

Miscellaneous small equipment 900

2. HYI contributed $1,800 to the company RPP on behalf of Amelia.

3. During the period July 1, 2021 to December 31, 2021, Amelia earned a salary of $45,000. Of these earnings, $44,135 was paid by the end of 2021 with the balance paid in January 2022. The company withheld the following amounts from her salary:

Income taxes $11,000

CPP 2,140

EI 816

RPP contributions 1,800

4. HYI provides group medical coverage to all its employees. The private health plan premiums paid by HYI on behalf of Amelia cost $1,700.

5. HYI strongly believes that employees who partake in healthy living get sick less often and achieve higher performance in the workplace. Thus, they have provided Amelia with a fitness membership at the local YMCA that cost the company $625 in 2021. They also paid $500 for her to take a painting class in October 2021. HYI supports hobby interests to help maintain the mental health of its employees.

6. Amelia exercised her employee stock options on November 29, 2021 when the shares were trading at $20 each. She has not yet sold her shares and intends to hold them for at least two years.

7. Amelia paid $300 in professional dues in 2021. The company does not reimburse its employees for their professional dues.

8. HYI paid Amelia a monthly allowance of $350 for six months in 2021 to cover the costs of maintaining workspace in her home. Amelia used her home workspace from July 1 to December 31, 2021. The workspace occupies 220 square feet of her 2,000 square foot home. The home workspace related costs include:

Mortgage interest $7,800

Computer purchase 1,800

Office supplies 1,750

Separate telephone line for clients 575

Home telephone 1,025

Electricity expense 975

Property insurance (six months) 700

Heat expense 800

9. Amelia was provided with an automobile that cost $42,000 (HST included). The vehicle was available to her for the entire six months she was employed with HYI in 2021. During this period, she drove a total of 18,000 kilometers, 5,400 km were related to personal use of the vehicle. HYI pays all operating and maintenance costs related to this vehicle.

Required:

Determine Amelias net employment income for 2021. Show all supporting calculations and explain the treatment of each item to receive full grades. Show your details in notes to the summary. Round all calculations to the nearest dollar.