Reference no: EM133001837
On January 2, 2020, Jackson Jones, a professional engineer, moved from Calgary to Edmonton to commence employment with Camden Ltd., a large public corporation. Because of his new employment contract, Jackson requires assistance in determining his employment income for tax purposes.
He has provided the following financial information:
1. His salary was $126,500. From this, Camden deducted Employment Insurance premiums of $856, Canada Pension Plan contributions of $2,898, registered pension plan payments of $8,000, and charitable donations of $1,200 as well as income tax.
2. Camden provides its executives with a bonus plan. Jackson's 2020 bonus was $26,600, of which $6,700 was received in December and the balance in March 2021.
3. In November, Jackson asked his employer to loan him $16,000 so that he could acquire an investment. Camden advised him that it was company policy not to make loans to employees. However, they gave him the $16,000, stipulating that it was an advance against his 2021 salary, which would be reduced accordingly.
4. Jackson was provided with a company car, which he drove 18,600 km for employment duties and 11,000 km for personal use. The car was leased at $500 per month. The total operating costs of $9,400 were paid by Camden. The car was available for personal use throughout the year.
5. Jackson's moving expenses to transport his belongings to Edmonton were $3,000. Camden paid this cost directly to a moving company on Jackson's behalf.
6. Jackson travels extensively for Camden. In December, he and his spouse used some of the travel points he had accumulated from this travel to attend his father's funeral in Toronto. As a result, he saved the normal airfare of $400 per ticket.
7. Camden paid the following additional amounts for Jackson:
Allowance ($400 per month) for acquiring executive apparel $ 4,800
Investment counsellor fees as part of Camden's counselling program 800
Golf club dues (Jackson rarely uses the club to conduct business) 2,000
8. Jackson paid for the following:
Dues to the engineers' association $ 1,070
Laptop computer and printer 2,930
Computer supplies (paper, etc.) 130
Camden had asked each senior executive to acquire a laptop computer at his or her own expense for work during travel.
9. Jackson sold 1,330 shares of Kolex Ltd. (his former employer) at $10 per share. Kolex is a Canadian-controlled private corporation. The shares were purchased under a stock-option plan in 2017 at $3 per share. Appraised value at that time was $5 per share.
Required:
Problem 1: Calculate: Jackson's
Net income from employment for the 2020 taxation year.
Net Income for tax purposes
Taxable Income