COMM 355 Assignment 2
1. The $2,400 gym membership is a non-taxable benefit. The $1,200 personal training cost is a taxable benefit.
2.
Standby charge: (%2)($101,000)(12) (11,000/20,004) = $13,329
Operating Cost Benefit – Lesser of: [($0.27)(11,000)] = $2,970 [(1/2)(13,329)] = $6,665
Gas allowance benefit: ($300)(12) = $3,600
Payment for operating expenses: ($7,512)
3. As her employer contributes to the plan and the contributions do not create a taxable benefit, the $4,345 in benefits received will be included in her employment income. This will be reduced by $350 of her contributions.
4. In 2013 when the shares are sold, there will be an employment income benefit of $2,000 ($14 - $12)(1000). As the option price of $12 was below the fair market value of $15 at the time options were issued, there is no deduction under (110)(1)(d).
Deferred Employment Income ($14 - $12)(1000) $2,000
Proceeds of disposition (1000)(16) $16,000
Adjusted Cost Base (1000)(14) ($14,000)
Capital Gain $2,000
Inclusion Rate ½ $1,000
Increase in Net Income for tax purposes $3,000
ITA 110(1)(d.1) (1,000)
Increase in Taxable Income $2,000
5. The $2,987 of counselling is a taxable benefit. The $350 of personal charges must be included in her income.
6. The $100,000 interest free loan is a taxable benefit and must be included in her income.
7.
a. The $1,500 Tissot watch is a non-cash long service award, and is taxable on the excess of $500; $1,000 award must be included.
b. Clothing allowance of $1,578 is taxable benefit.
c. The box of cigars is a taxable benefit, on the excess of $500. ($176 benefit)
d. The $1,200 travel allowance is a taxable benefit.
e. The gift from her husband is not a taxable benefit.
8.
a. Since these expenses were reimbursed, it is not deductible.
b. (40%)($4,973)(1/2) = $995 of meals and entertainment is deductible
c. Parking violation is not deductible.
d. $500 child care expense is deductible.
e. The legal fees are not
2.
Standby charge: (%2)($101,000)(12) (11,000/20,004) = $13,329
Operating Cost Benefit – Lesser of: [($0.27)(11,000)] = $2,970 [(1/2)(13,329)] = $6,665
Gas allowance benefit: ($300)(12) = $3,600
Payment for operating expenses: ($7,512)
3. As her employer contributes to the plan and the contributions do not create a taxable benefit, the $4,345 in benefits received will be included in her employment income. This will be reduced by $350 of her contributions.
4. In 2013 when the shares are sold, there will be an employment income benefit of $2,000 ($14 - $12)(1000). As the option price of $12 was below the fair market value of $15 at the time options were issued, there is no deduction under (110)(1)(d).
Deferred Employment Income ($14 - $12)(1000) $2,000
Proceeds of disposition (1000)(16) $16,000
Adjusted Cost Base (1000)(14) ($14,000)
Capital Gain $2,000
Inclusion Rate ½ $1,000
Increase in Net Income for tax purposes $3,000
ITA 110(1)(d.1) (1,000)
Increase in Taxable Income $2,000
5. The $2,987 of counselling is a taxable benefit. The $350 of personal charges must be included in her income.
6. The $100,000 interest free loan is a taxable benefit and must be included in her income.
7.
a. The $1,500 Tissot watch is a non-cash long service award, and is taxable on the excess of $500; $1,000 award must be included.
b. Clothing allowance of $1,578 is taxable benefit.
c. The box of cigars is a taxable benefit, on the excess of $500. ($176 benefit)
d. The $1,200 travel allowance is a taxable benefit.
e. The gift from her husband is not a taxable benefit.
8.
a. Since these expenses were reimbursed, it is not deductible.
b. (40%)($4,973)(1/2) = $995 of meals and entertainment is deductible
c. Parking violation is not deductible.
d. $500 child care expense is deductible.
e. The legal fees are not