Ms. Martha Gobel is a linguist, specializing in Asian languages. As the daughter of a Canadian diplomat, she has become familiar with the many customs and practices found throughout Asia. In 2019, a headhunting firm in B.C. connected her with Golden Mountain Experiences (GME), a public company, which had begun operations in Whistler, B.C. GME had a need of a representative to promote their Canadian services to Asian tour operators and executives.

When her mother was diagnosed with ovarian cancer, Martha moved into her house in Ottawa to help care for her. Her mother died in early 2019, leaving Martha her considerable estate, including her house. When GME offered her a position in November 2019 with a start date of January 1, 2020, she immediately accepted.

The final tax return of her mother stated the fair market value of her house was $525,000 on March 3, 2019. When Martha put the house on the market on November 15, 2019, the listing price was only $450,000 because a nearby landfill had inexplicably started to emit a very foul odor.

At the urging of the listing agent who said the stench was growing stronger, she accepted an offer for $390,000 in April, 2020, resulting in a $135,000 loss on this property.

Other Information:

Other information relevant to 2020 is as follows:

1. GME owned a suite hotel and offered her the use of a unit there at a rate of $2,000 per month. The regular monthly rate for the unit was $5,000 per month. She moved in on January 1, 2020. Through contacts, she finds a large townhouse in Whistler that she purchases on May 15, 2020 for $1,600,000. After doing extensive renovations, she moves out of the hotel and into her townhouse on July 1, 2020.

2. As an incentive to accept the position, GME agreed to compensate her for one-half of any loss on the sale of her Ottawa home. The $67,500 [(1/2)($135,000)] payment was made on May 30, 2020.

3. During 2020, Martha earned a salary of $175,000. This included commissions in the amount of $3,500. The Company withheld the following amounts from her salary:

Income Taxes $53,000

CPP 2,898

EI 856

RPP Contributions 2,500

4. GME contributed $2,500 on Martha's behalf to the Company's RPP.  

5. GME provides group medical coverage to all of its employees. The private health plan premiums paid by GME on Martha's behalf cost $1,115 for the year.

6. During the year, Martha received two non-cash gifts from GME, a season ski pass worth $1,000 and a Christmas gift certificate redeemable at many restaurants in Whistler Village for $100.

7. Her favorite uncle visited her and went skiing with a day pass that Martha provided. He died after falling and hitting his head on a boulder while skiing out of bounds. GME provided Martha with grief counseling services worth $665. She considered the counselor incompetent and the sessions useless.

8. Up until her uncle's death, Martha purchased many days passes at Whistler for friends and families using GME's 15 percent corporate discount. A statement from GME stated that Martha had saved a total of $1,050 using the discount in 2020.

9. GME provided Martha with a membership in the exclusive Blackcomb Ski Club And Spa. The cost of the annual membership was $5,000. Martha took her clients there for meals and drinks. GME paid all the charges on her account as they were related to potential clients of GME. For 2020, this amounted to $22,200.

10. Martha is required by the terms of her employment contract to provide her own vehicle for business use and this is specified in the T2200 provided by GME. It was purchased in late 2019 for $120,000, including HST. The vehicle was used by Martha throughout 2020. During the year, she drove the vehicle a total of 102,000 kilometers, of which 76,500 were related to her employment duties. Martha pays all operating and maintenance costs, a total of $23,000 during the year.

11. Martha's demanding job requires her to meet with clients at all hours of the day and night because many of them are on international flights. GME will provide her with a signed form T2200 stating that she is required to pay for certain employment expenses without reimbursement and use a portion of her home for work.

Martha has renovated in order to have a separate area in her townhouse to be used exclusively to entertain her clients, in addition to signing the contracts. She has no receipts for the renovations she did. She was unable to find a contractor who would invoice and accept cheques. Since she needed the work finished quickly, Martha reluctantly paid cash. She used this workspace between July 1 and December 31, 2020. This workspace occupied 600 square feet of the 2,222 square feet available in her townhouse.

Work space-related expenditures are as follows:

Monthly Maintenance Fee (For 6 Months) $5,400

Hydro (For 6 Months) 450

Property Insurance (6 Months) 575

Property Tax (6 months) 2,600

Big screen TV used solely for the entertainment of clients (promotional videos, ski races, etc.) 2,600

Office Furniture 5,600

Furniture for client's entertainment area 12,400

12. Martha received an allowance of $400 per month for 6 months to cover the costs of maintaining a workspace in her home.

Required:

Calculate Martha's net employment income for 2020.