QUESTION #1

Mrs. Jane Brown is employed by X Ltd., a Canadian Controlled Private Corporation(CCPC). Jane is an engineer and her job requires her to be travelling to various parts of Canada and the United States. You have known Jane since your University days and she knows you are a tax accountant. She has come to you for some tax advice relating to her tax position as it relates to her employment income under Division B of the Income Tax Act(ITA).

Jane has provided you with the information given below with respect to the income received from her employer for the year 2019.

Net Salary...$84,746

Withholding by employer from salary:

Income Tax....$42,000

Registered Pension Plan ........ 8,400

Canada Pension Plan........ 2,544

Employment Insurance....... 955

Group Term life Insurance .... 750

Union dues to the Canadian Engineering Union............... 1,600

Group disability insurance . ..... 480

Monthly rent reimbursement.......4,800

Payment for personal use of car.. ....... 2,100

Total Salary..$63,629

Additional Information provided by Jane for payments made to her by Company:

1. She has to travel to various parts of the country for a considerable amount of time on Companys business, X pays her rental in Toronto ..$4,800
2. X also pays her board and lodging for visiting various construction sites..20,000
3. Bonus received at the year end.......................10,000
4. Provision of safety equipment. 500
5. Registered Pension Plan Contribution.. 8,400
6. Monthly allowance to cover phone calls, laundry and other related costs when

Travelling. 3,000

vii.Directors fees. 2,000

viii.Payment received from group disability plan while disabled when she fell off a

Ladder at one of the work sites2,480

Premiums paid to date to the Insurance company was $600.

ix. Fitness Club membership fees to a club with franchises across Canada800

x. A Shoppers Drug Mart gift card for her birthday..700

xi Proceeds from the sale of 200 shares acquired under a stock option plan 3,600

(when she was granted the stock option in 2017, the fair market value of the stock was$12; when she exercised the option the fair market value was $13 per share).The option price was $7.00 per share.

xii.Costs to Company of her eating lunch once per month in the executive dining room ..300

at no cost to her.

xiii.Expenses paid by Company for Janes husband who accompanied her on a siteTrip to Montreal for Company business..2,050

xiv.Other Employer paid expenses:-

Group Term life insurance premium$750

Liberty Health Extended Health Insurance..... 900

Ontario Health Payroll tax.1,100

Registered Pension Plan8,400

xv.Due to her extensive travel, the Company leased a 4X4 vehicle on January 1^st.,2019 at $945 which includes HST at a total cost of $11, 340. The operating cost for the year paid by the employer was $4,000 . During the year, Jane had driven 34,000 kilometres for work and an additional 6,000 km for personal use.

xvi.On June 1^st.2019, Jane borrowed $200,000 from her employer for the purchase of a home in Alberta. The Company has a policy to lending employees loans towards the purchase of a home at a rate of 1% annually.(assume that the prescribed rate of interest for 2019 were:-1^st. Qtr.=2%; 2^nd Qtr. 3%;3^rd Qtr.=4%; 4^th Qtr. =1%).

xvii .Jane and her husband went to a vacation to the Bahamas for 2 weeks. They rented the Companys condo in the Bahamas for $300 per week. The fair market rental of similar accommodation in the Bahamas was $450 per month.

Required:-(a) Determine the amount of Jane Singhs income from employment for the year ended December 31^st. 2019. Show all your calculations