Reference no: EM133033891

Question - Klaxton Inc. provides an automobile to Ms. Roxanne Smith for her to use in carrying out her employment duties. Ms. Smith is given full possession of the car and is allowed to use it for personal needs. However, when she is not using it for employment or personal activities, it must be returned to Klaxton's premises so that it can be used by other employees.

The automobile was purchased in 2017 for $42,000 and, during the years 2017, 2018, and 2019, the Company has deducted maximum CCA.

During 2019, Ms. Smith drove the car 48,000 kilometers, with the Company paying for all of the operating costs. These costs totaled $9,850 during the year.

Required: Ignore all GST/PST/HST implications. Indicate the minimum taxable benefit that would be allocated to Ms. Smith in each of the following Cases:

Case A Ms. Smith has use of the car for 11 months of the year. Personal use during the year totals 4,000 kilometers.

Case B  Ms. Smith has use of the car for 10 months of the year. Personal use during the year totals 23,000 kilometers.

Case C Ms. Smith has use of the car for 8 months of the year. Employment use during the year totals 4,000 kilometers.