Question 1

Mark is a commission based sales person. His primary work is away from the head office. Mark's employers signed a T2200 form certifying that no reimbursements are paid for any expenses Mark incurs to earn commissions. Mark incurs the following expenses, exclusively for business use: Meals and Entertainment 15,000 Fuel 5,000 Insurance 1,000 Repairs 1,500 Lease on Car 500/month What are Mark's deductible employment expenses? options:

1) 10,000

2) 15,250

3) 28,500

Question 2

Which one of the following would be considered employment income for Canadian income tax purposes?

1) A private health services plan premium paid by your employer.

2) An all-expense-paid trip to Europe provided to you by a supplier of your company for reaching a sales quota.

3) Amounts paid by your employer for counselling services in respect of mental and physical health.

4) Benefits paid by your employer to a deferred profit sharing plan that does not pay out until 2024.

Question 3

Bill is the CEO of ABC Ltd. Bill takes his wife, Mary, on a three-day convention. Mary represents ABC Ltd. at the convention, and hands out brochures and gives a talk on motivational speeches, but she is not an employee of Bill's company. Which of the following statements is true for 2018?

1) No employee benefits will be added to either Bill's or Mary's income since Mary was primarily engaged in business activities on behalf of Connection Ltd.

2) Fifty per cent of the trip's cost for Mary would be added to Bill's employment income because she is not an employee of the company.

3) The cost of the hotel for Bill's wife would be added to Bill's employment income because she is not an employee of the company; thus, a personal benefit was received.

4) The cost of the trip for Mary would be added to her personal tax return as employment income even though she is not a regular employee of the company.

Question 4

Sandy is given the choice to receive a pay raise, either as a salary increase of $7,200 or as a benefit of a company leased car that will cost her employer $600 per month to rent, including HST. Sandy has come to you for advice so that she can minimize her employment income and thereby minimize her taxes. Which of the following statements is true?

1) Sandy should accept the salary.

2) Sandy should be indifferent between the two choices.

3) Sandy should ask her employer to lease a cheaper car and then pay the difference between the monthly leasing costs as part of her salary.

4) Sandy should accept the leased automobile.

Question 5

Which of the following statements is true regarding employment income?

1) All allowances and reimbursements received are taxable.

2) Some allowances are taxable but no reimbursements received are taxable.

3) All allowances and some reimbursements are taxable.

4) Some allowances and some reimbursements are taxable.