The information and answer is given in the images. I just need to know how they calculated imputed interest on housing loan 170. Just need to know the steps. Thanks
The information and answer is given in the images. I just need to know how they calculated imputed interest on housing loan 170. Just need to know the steps. Thanks
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 38P
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The information and answer is given in the images. I just need to know how they calculated imputed interest on housing loan 170.
Just need to know the steps. Thanks
Transcribed Image Text:Malachi had $36,000 for a down payment on his new Ottawa home. Since
he had no previous work experience, the banks were reluctant to provide
him a mortgage at favourable terms. His employer stepped in and agreed
to give him an interest free housing loan of $200,000 beginning on
December 1, 2021. Malachi agreed to reduce his salary slightly with
respect to this benefit. The loan requires annual payments of $7,600 due at
the end of November beginning in 2022. The loan is required to be paid if
Malachi dies, sells the home, or terminates his employment. Assume that
the prescribed interest rates for such benefits are 2% in each of the first
two quarters of 2021 and 1% in the third and fourth quarters.
Transcribed Image Text:The table below could be used to find Malachi Leighton's employment income
for the taxation year.
Item 1 - Signing bonus
Item 1 - Salary received
Item 1 - RPP contributions withheld
Item 1 - Other items
Item 2 - Bonus received
Item 3 -
Counselling services
Item 4 - Group medical coverage
Item 5 - Employer contribution to RPP
Item 6 - Professional dues paid
Item 7 - Wedding gits
Item 8 - Squash club membership
Item 9 - Housing loss reimbursement
Item 10 - Imputed interest on housing loan
Item 11 - Stock option benefit
Item 12 - Automobile benefit
Item 13 - Stationery and supplies
Item 13 - Long distance calls
Item 13 - Home office
Item 14 - Home office allowance
Employment income
$10,000
$63,050
($1,100)
Nil
$2,500
Nil
Nil
Nil
($149)
Nil
Nil
$2,100
$170
$1,240
$740
($136)
($71)
($560)
$2,100
$79,884
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