Taxation Question : Choose the one best answer.

Employee Benefits

2.During 2016, Nellie Ward receives from her current employer:

A $400 gift certificate for online retailer Amazon.

A $600 reclining easy chair for outstanding customer service during the year.

A set of 4 coffee mugs with the employers logo etched on the side.These mugs cost the employer $20.

An Easter basket of gourmet treats valued at $245.

A cash award of $300 in recognition of 10 years of service with the employer.

What is the amount that will be included in Nellies 2016 Net Income For Tax Purposes due to the gifts?

A.$800.

B.$1,000.

C.$1,300.

D.$700.

Automobile Benefits

3.With respect to employment related automobile costs and benefits, which of the following statements is correct?

A.When an employee is provided with an automobile that is purchased by the employer for $50,000, the taxable benefit to the employee will be based on the prescribed limit of $30,000.

B.An employee who uses his own vehicle for employment related activities cannot deduct any financing costs related to the acquisition of the car.

C.An employee who is provided with a vehicle owned by his employer can deduct capital cost allowance to the extent that the vehicle is used for employment related activities.

D.If an employee drives an employer provided vehicle for more than 20,004 kilometers of personal use during a year, there will be no reduction of the basic standby charge.

Allowances and Reimbursements

4.Which of the following statements with respect to allowances is NOT correct?

A.An allowance from an employer to cover an employees professional association dues will not be included in an employees income.

B.Reimbursement by an employer of an employees moving expenses will not be included in an employees income.

C.Travel allowances provided by an employer are never included in an employees income.

D.In general, employers prefer allowances to reimbursements.