15 Feb Ms. Emm Tax is employed as an internal auditor of Uncle Stan’s Enterprises Limited, a Canadian-controlled private corporation. She is provided with a car owned by the corporation t

Question 2: Net Employment Income
Ms. Emm Tax is employed as an internal auditor of Uncle Stan’s Enterprises Limited, a Canadian-controlled private corporation. She is provided with a car owned by the corporation to allow her to travel to the various plants and offices of the firm. An amount is withheld from her salary for the personal use of the car, which amounts to 30% of the 30,000 total kilometres driven in the year. On her auditing trips, she is away for a minimum of five days. Ms. Tax is considered to be a “key employee” and receives various benefits, including stock options.
Ms. Tax presents you with a shopping bag full of receipts and notes written on scraps of paper from which you develop the following information for the year 2022.
Net salary
Withholding by employer from salary
Income tax
Registered Pension Plan
Canada Pension Plan (enhance portion is $461) Employment Insurance
Group term life insurance
Group disability insurance (40% of total premium) Payment for personal use of company car
Total gross salary
$42,000 8,400 3,500 953 750 400 2,100
$84,744
58,103 $142,847
$ 8,100 31,280
3,750
1,500
950
100
500
900
200
200
300
Travel allowance paid by employer
($135 per day for 60 days; actual reasonable travelling expenses for 2022 were $10,665, consisting of $2,400 for meals, $4,400 for accommodation, and $3,865 for air and ground transportation)
Book value of company-owned automobile
(original capital cost in November 2021 of $32,000, plus 13% HST; capital cost allowance claimed by company in 2022 of $4,950; operating costs paid by employer for 2022 of $9,575, including HST)
Payment received from group disability plan while disabled by falling off a loading dock while counting inventory
(she paid premiums of a total of $1,200 since commencing employment in 2018 and she has not received benefits previously)
Employer contributions
Group term life insurance policy Premium 450 Group disability insurance plan (60% of premium) 600 Liberty Health extended medical insurance premium 900 Registered Pension Plan 8,400
Proceeds received from sale of 100 shares of stock (representing less than 1% of all shares) acquired under the employee stock option plan at an option price of $10 per share
(when she was granted the option in 2018, the fair market value of the stock was $12; when she exercised the option in 2018, the fair market value was $13)
Fees paid by company for University of Waterloo correspondence course in philosophy taken on Ms. Tax’s own initiative on her own time
Donation to Lower Taxes Party of Canada, a registered political party
Premium paid by Ms. Tax on personal whole life insurance policy
Membership fees paid by Ms. Tax to athletic club
Interest received on Canada Savings Bonds purchased through payroll savings plan Birthday gift paid in cash under company policy and deducted by employer
Cost (including all taxes) to company of her eating lunch once per month in the executive dining room at no charge
Interest paid to company on a $10,000 loan for unanticipated expenses; the loan was outstanding throughout 2022 at a rate of 1%
(assume that the prescribed rates for 2022 are: 2%, 3%, 4%, and 3% for the first, second, third, and fourth quarters, respectively)
Value of internal auditor’s required uniform consisting of green eyeshade, elastic armbands, white blouse, and dark grey suit (three sets), all tastefully monogrammed with the firm’s logo and provided by the company
Premium paid by Ms. Tax for Liberty Health private dental insurance
Dues paid by Ms. Tax to the Institute of Internal Auditors, a professional body recognized by legal statute
Gain on sale of shares purchased as a result of a stock tip given by Uncle Stan who was told by a friend that Underground Airways stock was about to take off
Bonus payable on December 31, 2022 but not paid to Ms. Tax until January 2023
Expenses paid by company for Ms. Tax’s husband who accompanied her on an auditing trip to Moosonee
Required:
100
2,700 500
450
1,200 4,000
2,050
(A) Determine the amount of Ms. Tax’s income from employment for 2022. Show all aspects of the required calculations, whether or not necessary to the final answer. Provide an explanation as to why the amount must be included in income.
(B) Comment on why you consider any of the above amounts to be inapplicable to the calculation. Be sure to comment on all items not used in your computation of employment income.