Susanna Sculley, a marketing representative with MBI Technology Inc. (A Private company Qualified as CCPC), provided the following information relating to her current year's personal income tax return. Susanna's cumulative pay at the current year end (2021) revealed the following: Gross pay Base salary .... ..........$ 42,000 Gross commissions 33,000 Daycare subsidy program .1,200 Deductions from gross pay Employment Insurance contributions .. (860) Canadian Pension Plan contributions (2,749) Union dues (280) Income tax paid (19.800) $ 52,511 #HERRRRRRRR BER Net pay. ***** BBBBBEER Some expenses incurred to earn commission income: Travel expenses (hotel and airfare).......... 4,510 Restaurant bills ............ ..4,530 (Note I below) Golf club membership and food ........ ..2,300 (Note 2 below) Additional Notes: 1. The $4,530 restaurant bills mentioned above contained 5 times meeting with the clients. 2. The $2,300 golf club membership and food expenses mentioned above include the $1,000 annual membership fees and $ 1,300 for lunch with clients for their business meetings. 3. Susanna has also paid $2,000 for DMA CM designation annual due and $ 1,000 CPA designation annual due. DMA CM designation is the highest designation in Canada for Marketing a 4. MBI has also granted Susanna a stock option six years ago in April 2015 to purchase the firm's stock at price of $10.50 per share and the fair market value of the stock at that time was $11.50 per share. She has exercised the option and purchased 1,000 shares in April of 2018. Stock price at the exercise time was $14.50 per share. In August of the current year, Susanna has sold the 1,000 shares to one of the owners at $17.00 per share. 5. Due to COVID 19, Susanna also set up a show room in her resident home. She has converted formal living room into the products show room. The living room is about 20% of her home size. (It has based on the square footage estimated). She has used the home office to hold online meetings with clients and potential customers. She has also shown the products and made sales deals during the meeting. In order to keep the safety of the products, she has also purchased special insurance (in addition to home insurance) to insure these products. The special insurance has costed her $500 per year. Susanna has also spent $1,200 to decorate the showroom and purchase supplies for the showroom. Other expenses for the whole home in the year are shown below: Utility expenses $ 4,800 Maintenance expenses $1,500 Home insurance $ 1,500 Property taxes $ 4,800 Mortgage interest $ 7,200 Susanna's employer did not reimburse her or provide her with an allowance for any expenses mentioned in the problem. However, MBI did expect her to take clients out for lunch and travel when necessary Required: A. Susanna would like you to calculate her income from employment for the current year. Please cross-reference your answer to the appropriate sections of the Act to each of the items included in the employment income. You need to present the calculation details and explanations wherever needed. Be sure to list as "items omitted for any of the above amounts omitted in the calculation of employment income with the appropriate cross-reference (why omitted) as well. B. Suppose Susanna had a very bad year this year and only eamed S 3,000 commission income (rather than $ 33,000). What's the maximum deduction allowed for the few expenses incurred to earn commission income (travel expense, restaurant bills, and golf club membership and food)? According to which tax rule
