QUESTION #3(25 MARKS):-

In late 2020, Dr. Alfred Mann separated from his wife. Since May of 2006, Dr. Mann had been working as a public health consultant for the X Company. On April 30^th.. 2021 he accepted a staff position at the Toronto General Hospital and moved directly from Niagara to Toronto on May 1^st. 2021.

On February 1^st.2022, Dr. Mann asked you to prepare his 2021 tax return.He provided you with the following details:-

Salary from the Niagara region.$50,000

Deductions:-

Income taxes$7,500

Canada Pension Plan contributions. 900

Employment insurance contributions. 200

Salary from the Toronto General Hospital...$150,000

Deductions:-

Income taxes$35,500

Canada Pension Plan contributions. 2,000

Employment insurance contributions.. 600

Registered pension plan contributions4,000

Group income protection premiums paid.. 150

Group term life insurance premium 90

Additional Information:-

i. On February 1^st. 2021, the X Company had offered its employees the rights to purchase shares in the Company at an option price of $10.00 per share. On March 1^st Dr. Mann purchased 50,000 shares when the market price per share was $15 per share. Then on April 1^st., he purchased an additional 5,000 shares when the market value was $16 per share. On September 15^th. he wanted to take a vacation to Europe and sold 10,000 of the shares when the market price was $19 per share.

ii. On May 1^st.,when Dr. Mann moved from Niagara to Toronto, the Hospital gave him a moving allowance of $10,000. They also loaned him $300,000 at 1% for the purchase of a condominium in Toronto. Assume that the fair market value of interest rates were Qtr.1- 4%; Qtr.2-3%; Qtr. 3-5%; Qtr. 4-2%.

iii. When Dr. Mann was with the X Company, he was provided with a leased car by the employer. The employer had leased the car at $700 per month plus taxes. The operating expenses paid by the Company for this vehicle from Jan. 1^st. 2021 to April 30^th. 2021 were $2,850. For the four month period in 2021 when he was with the X Company he drove the car 5,000 kilometres for personal use out of a total of 15,000 kilometres.

For the Toronto job, Dr. Mann was required to use his own car for business. He had bought his car in November of 2020 for $30,000 plus taxes. He took a loan of $25,000 for the purchase of the car. His operating expenses for gas, oil, licence and repairs totaled $2,600 in 2021. He drove the car 5,000 kilometres for business use out of a total of 20,000 kilometres for the year.

iv. The hospital provided him with an allowance of $500 per month for the use of his car.

v. Dr. Mann won $10,000 in a Hospital lottery.

vi. He paid professional fees of $1,200 to the Medical Association of Canada.

vii. He received a painting at Xmas from the hospital. The fair market value of the gift was $700.

vii. The Hospital paid is membership at the Good Life Fitness centre of $2,000.

Required:-Compute Dr. Manns 2021 employment income following the rules under S3 of the Income Tax Act stating any omissions from your calculation.