Net Income for tax (13 marks)

Mr. Bernard works for a large Canadian public pharmaceutical company and earns a salary of $210,000. His employer provides him the following benefits:

Pays private health insurance premiums of $2,300 per year.

Pays life insurance premiums of $490.

Stock options

o On January 15, 2019 Mr. Bernard was granted options to buy 2,500 shares at a price of $17 per share. At this time the shares are trading at $18 per share.

o Mr. Bernard exercises all of the options when the shares are trading at $19.50 on July 15, 2019.

o On September 10, 2019 the share price spikes and Mr. Bernard sells all his shares for $21.25 per share.

Mr. Bernard holds shares of other public companies, and the shares pay the following dividends.

Bobs Telephone Co. pays $2,600 eligible dividends.

Orange Tech Co. pay $5,100 non-eligible dividends.

Required: Determine Bernards net income for tax purposes for the year ending December 31, 2019. (13 marks)

a. Calculate employment income.

b. Calculate property income.

c. Calculate capital gains.

Show all calculations on response template.

(3 Marks will be awarded for items included in the proper income category)

a. Show calculations for net employment income below. Enter your final number on the line provided.

3(a) Net employment income.	$

b. Show calculations for net property income below and enter final number on the line provided.

3(a) Net property income.	$

c. Show calculations for taxable capital gains below and enter final number on the line provided.

3(b) Taxable Capital gains	$

Net income for tax purposes$