Beam Hines is a translator who works for a consulting firm in Mississauga. Her 2020 salary is $73,500, from which her employer, a Canadian controlled private company, deducts maximum CPP and EI contributions. Also deducted is an RPP contribution of $2,600. The employer makes a matching contribution ($2,600). Her employment compensation does not include any commission income. Other Information: 1. To reward Beam for her outstanding work, and as an incentive to stay with the company, her employer has awarded her a bonus of $10,000 that will be paid in August 2021. 2. Beam received options to purchase 200 shares of her employer’s stock at a price of $72 per share last year. At the time the options were granted, the fair market value of the shares was $74 per share. During May 2020, when the shares had a fair market value of $90 per share, Beam exercises all of these options. She is still holding these shares at the end of the year. (Note: please mention the result of stock options benefit in your answer even it is nil). 3. Beam is provided with an automobile by her employer. The automobile was leased on February 1, 2020, at a monthly rate of $565, a figure which includes a payment for insurance of $75 per month. The automobile is driven a total of 36,000 kilometres, 32,000 of which were employment related. It was available to her from February 1 to the end of the year. The employer did not provide an automobile during the month of January. 4. During 2020, Beam spent $5,600 on employment-related meals and entertainment with clients of her employer. Her employer reimbursed $3,200 of these costs (she was not given the certificate T2200 Declaration of Conditions of Employment by her employer). 5. During 2020, Beam receives several gifts from her employer: • As is the case for all of the company’s employees, Beam receives a $150 gift certificate that can be used for merchandise at a local department store. • In recognition of her 10 years of service, Beam receives a Visconti fountain pen she has been coveting. The retail value of this pen is $1,000. • At Christmas, all of the company’s employees receive a gift basket of holiday treats. The retail value of these gift baskets is $200. 6. After years of accumulating savings and living in rental units, Beam and Mark purchase a residence. The cost of the house is $380,000 and, to assist with the purchase, Beam’s employer provides a $100,000 interest free loan. The loan was granted on May 1, 2020 and will have to be repaid on April 30, 2025. Assume the prescribed rate is 2 percent throughout the year 2020. 7. Because of the nature of her employment, Beam is required to pay annual professional dues of $350. 8. During 2020, Beam makes her annual contribution of $1,000 to a registered charity, Salvation Army and $500 to a Federal Political Party. 9. During 2020, Beam pays $700 for the prescription drugs. Required: Determine Beam’s minimum employment income for the 2020 taxation year
Beam Hines is a translator who works for a consulting firm in Mississauga. Her 2020 salary is $73,500, from which her employer, a Canadian controlled private company, deducts maximum CPP and EI contributions. Also deducted is an RPP contribution of $2,600. The employer makes a matching contribution ($2,600). Her employment compensation does not include any commission income.
Other Information:
1. To reward Beam for her outstanding work, and as an incentive to stay with the company, her employer has awarded her a bonus of $10,000 that will be paid in August 2021.
2. Beam received options to purchase 200 shares of her employer’s stock at a price of $72 per share last year. At the time the options were granted, the fair market value of the shares was $74 per share. During May 2020, when the shares had a fair market value of $90 per share, Beam exercises all of these options. She is still holding these shares at the end of the year. (Note: please mention the result of stock options benefit in your answer even it is nil).
3. Beam is provided with an automobile by her employer. The automobile was leased on February 1, 2020, at a monthly rate of $565, a figure which includes a payment for insurance of $75 per month. The automobile is driven a total of 36,000 kilometres, 32,000 of which were employment related. It was available to her from February 1 to the
end of the year. The employer did not provide an automobile during the month of January.
4. During 2020, Beam spent $5,600 on employment-related meals and entertainment with clients of her employer. Her employer reimbursed $3,200 of these costs (she was not given the certificate T2200 Declaration of Conditions of Employment by her employer).
5. During 2020, Beam receives several gifts from her employer:
• As is the case for all of the company’s employees, Beam receives a $150 gift certificate that can be used for merchandise at a local department store.
• In recognition of her 10 years of service, Beam receives a Visconti fountain pen she has been coveting. The retail value of this pen is $1,000.
• At Christmas, all of the company’s employees receive a gift basket of holiday treats. The retail value of these gift baskets is $200.
6. After years of accumulating savings and living in rental units, Beam and Mark purchase a residence. The cost of the house is $380,000 and, to assist with the purchase, Beam’s employer provides a $100,000 interest free loan. The loan was granted on May 1, 2020 and will have to be repaid on April 30, 2025. Assume the prescribed rate is 2 percent throughout the year 2020.
7. Because of the nature of her employment, Beam is required to pay annual professional dues of $350.
8. During 2020, Beam makes her annual contribution of $1,000 to a registered charity, Salvation Army and $500 to a Federal Political Party.
9. During 2020, Beam pays $700 for the prescription drugs.
Required:
Determine Beam’s minimum employment income for the 2020
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