Reference no: EM133472293

Case: Ms. Lacy Compton is a 45-year-old widow with two children:

John Her son, John, is 22 years old and lives with her in a residence that she owns. He qualifies for the disability tax credit, and although he volunteers for various community groups he has no income of his own in 2022.

Allison Her 17-year-old daughter, Allison, has just started university and, in 2022, she attended on a full-time basis for four months. Her tuition fees that were paid in 2022 were $2,850. As she is attending a local university, Allison lives in her mother's home in 2002. Allison has no income of her own and she intends to transfer her tuition credit to her mother.

In 2022, her family's qualifying medical expenses are as follows:
Lacy $ 4,220
John 11,500
Allison 2,180
Total $17,900

In 2022, Ms. Compton makes donations to registered charities of $1,250, as well as contributions to registered federal political parties in the amount of $350.

Ms. Compton is employed as a salesperson by a large Canadian public company. In 2022, her salary is $68,000. In addition, she earns $13,500 in commissions during the year. For the 2022 taxation year, her employer withholds the following amounts from her income:

RPP contributions* $2,800
EI premiums 953
CPP contributions 3,500
Professional association dues 250
Payments for personal use of employer's car 1,800
*Ms. Compton's employer makes a matching contribution of $2,800 to her RPP.*

The car that she used in 2022 cost her employer $32,000. In 2022, it was used by her for 11 months of the year. It was driven a total of 27,000 kilometers, of which 22,500 was for employment-related use and 4,500 for personal use. During the one month that she did not actually use the car, her employer required that she return it to the company premises.

She is required by her employer to maintain an office in her home. In 2022, this office occupied 15% of the livable floor space in her home, including a component for common areas. The cost of the house (excluding the land) is $335,000. Her 2022 costs for 100% of the livable floor space were as follows:

Mortgage interest $5,800
Property taxes 2,450
Utilities and maintenance 1,100
Insurance 425
Total $9,775

In conjunction with her sales activities, she incurred costs for meals and entertainment of $4,350. These were not reimbursed by her employer. All of these costs were incurred with respect to travel that required an overnight stay.

In addition to her employment, Ms. Compton carries on and manages a retail business as a sole proprietor. The fiscal period of the business ends on December 31 and, in 2022, the business had accounting income of $53,500. Other information related to the business is as follows:

1. As the business is not incorporated, no income taxes were deducted in calculating the business income.

2. In 2022, $8,600 was spent on landscaping around the business premises. For accounting purposes, this amount is being amortized over 10 years on a straight-line basis.

3. At the beginning of 2022, Ms. Compton owned depreciable property used in the business with the following UCC balances:
Class 1 Class 8 Class 10
January 1, 2022, UCC $233,000 $41,500 $27,000
The class 1 building was acquired in 2016.

In March 2022, class 8 property with a capital cost of $12,000 was sold for $8,600.
Additional class 8 property with a capital cost of $13,400 was purchased.

4. The accounting business income figure of $53,500 is after the deduction of amortization expense of $12,800 and $6,000 in meals and entertainment with clients of the business. The amortization expense includes the amortization of the landscaping costs.

Required: Calculate Ms. Compton's 2022 net income, taxable income, and her minimum federal income tax payable without consideration of any income tax withheld by her employer. Ignore GST/ HST & PST considerations.