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You are employed as a sales representative throughout 2020, with plus a commission on all your sales. Your commissions income in employer reimburses you for your hotel, meals, and airline costs. A promotion expenses are your expense as the employer will not pro reimbursement for these expenses. You use your own car for work. You receive an allowance for using $1,500 each month. The ending balance UCC of Class 10 is $16,0 2019.You estimate that for 2020 the total costs associated with driv Operating Costs Financing Costs Total $10,600 1,800 $12,400

You are employed as a sales representative throughout 2020, with plus a commission on all your sales. Your commissions income in employer reimburses you for your hotel, meals, and airline costs. A promotion expenses are your expense as the employer will not pro reimbursement for these expenses. You use your own car for work. You receive an allowance for using $1,500 each month. The ending balance UCC of Class 10 is $16,0 2019.You estimate that for 2020 the total costs associated with driv Operating Costs Financing Costs Total $10,600 1,800 $12,400

CONCEPTS IN FED.TAX.,2020-W/ACCESS
CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter6: Business Expenses
Section: Chapter Questions
Problem 38P
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You are employed as a sales representative throughout 2020, with a salary of $275,000 plus a commission on all your sales. Your commissions income in 2020 is $55,000. The employer reimburses you for your hotel, meals, and airline costs. Advertising and promotion expenses are your expense as the employer will not provide an allowance or reimbursement for these expenses. You use your own car for work. You receive an allowance for using your own car of $1,500 each month. The ending balance UCC of Class 10 is $16,000 on December 31, 2019.You estimate that for 2020 the total costs associated with driving your car wilIl be: Operating Costs Financing Costs Total $10,600 1,800 $12,400 Other Information 1. Your employment related expenses are: Travel Costs (Hotel And Airline Costs) Travel Costs (Meals) Advertising And Promotion $18,000 8,500 23,000 2. You drive the car a total of 53,000 kilometers during 2020, with 37,000 kilometers of these related to work. 3. You have a group disability insurance plan and the company pays all of the premiums. The plan provides periodic benefits that compensate for lost employment income. This costs the employer $4,500 per year. 4. The employer provides a $1,000,000 life insurance policy for you. The premiums paid by the employer cost $3,800 each year. Required: Calculate your 2020 net employment income.
Transcribed Image Text:You are employed as a sales representative throughout 2020, with a salary of $275,000 plus a commission on all your sales. Your commissions income in 2020 is $55,000. The employer reimburses you for your hotel, meals, and airline costs. Advertising and promotion expenses are your expense as the employer will not provide an allowance or reimbursement for these expenses. You use your own car for work. You receive an allowance for using your own car of $1,500 each month. The ending balance UCC of Class 10 is $16,000 on December 31, 2019.You estimate that for 2020 the total costs associated with driving your car wilIl be: Operating Costs Financing Costs Total $10,600 1,800 $12,400 Other Information 1. Your employment related expenses are: Travel Costs (Hotel And Airline Costs) Travel Costs (Meals) Advertising And Promotion $18,000 8,500 23,000 2. You drive the car a total of 53,000 kilometers during 2020, with 37,000 kilometers of these related to work. 3. You have a group disability insurance plan and the company pays all of the premiums. The plan provides periodic benefits that compensate for lost employment income. This costs the employer $4,500 per year. 4. The employer provides a $1,000,000 life insurance policy for you. The premiums paid by the employer cost $3,800 each year. Required: Calculate your 2020 net employment income.
Part 1 (ITA 3) Division B Net Income to Division C Taxable Income to Taxes Payable for Individuals ITA 3(a) + Bin # 1- Net Employment - losses carry forward 20 years and carry back 3 years (carrying baskets) + Bin # 2 - Net Business & Property – losses carry forward 20 years and carry back 3 years (carrying baskets) + Bin # 4 - Other Income ITA 3 (b) + Bin # 3 Net Capital – losses carry forward for infinity and carry back 3 years (carrying basket) ITA 3 (c) Bin # 5 - Other Deductions = Sources of Income ITА З (d) Losses in current year from Bins 1, 2, 4 = Division B Net Income Equivalent to Capital Gains Deduction for Employee Stock Options ITA 110 Payments included to calculation Division B but not included for Division C (e.g. social assistance) Losses from other years (carrying baskets Bin #1 & 2) ΙΤΑ 111 Losses from other years (carrying basket Bin #3 limited to Net Capital Income included in ITA 3 (b)) = Division C Taxable Income x Applicable Tax Rates ΙΤΑ 118 Tax Credits = Division E Taxes Payable for Individuals
Transcribed Image Text:Part 1 (ITA 3) Division B Net Income to Division C Taxable Income to Taxes Payable for Individuals ITA 3(a) + Bin # 1- Net Employment - losses carry forward 20 years and carry back 3 years (carrying baskets) + Bin # 2 - Net Business & Property – losses carry forward 20 years and carry back 3 years (carrying baskets) + Bin # 4 - Other Income ITA 3 (b) + Bin # 3 Net Capital – losses carry forward for infinity and carry back 3 years (carrying basket) ITA 3 (c) Bin # 5 - Other Deductions = Sources of Income ITА З (d) Losses in current year from Bins 1, 2, 4 = Division B Net Income Equivalent to Capital Gains Deduction for Employee Stock Options ITA 110 Payments included to calculation Division B but not included for Division C (e.g. social assistance) Losses from other years (carrying baskets Bin #1 & 2) ΙΤΑ 111 Losses from other years (carrying basket Bin #3 limited to Net Capital Income included in ITA 3 (b)) = Division C Taxable Income x Applicable Tax Rates ΙΤΑ 118 Tax Credits = Division E Taxes Payable for Individuals
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