Olin Packett has been employed for over 10 years by a large Canadian public corporation. He works in their Victoria office.
For the 2020 year, his gross salary is $75,000. While he does not receive commissions, he was awarded a bonus of $15,000 during 2020 based on his sales performance. One-half of this is paid in December, 2020, with the balance to be paid in February, 2020.
During 2020, Olin's employer withheld the following amounts from his gross wages: Other Information
1. Olin is provided with a car that the company leases at a rate of $723 per month, including both GST and PST. The company pays for all of the operating costs of the car and these amounted to $4,200 during 2020. Olin drove the car a total of 33,000 kilometers during 2020, 27,500 kilometers of which were carefully documented as employment related travel. While he was in the hospital for 2 months (see Item 4), his employer required that the car be returned to company premises.
2. Olin was granted options to acquire 500 shares of his employer's common stock at a price of $31.00 per share 2 years ago. On the date the options were granted, the shares were trading at $29.50 per share. These options were exercised by Olin on February 16, 2020, when the shares were trading at $34.75 per share. Olin does not plan to sell the shares for at least 2 years.
3. In order to assist Olin in acquiring a new residence in Victoria, his employer granted him a three year, interest free loan of $175,000. The loan was granted on July 1, 2020 and, at this point in time, the interest rate on open five year mortgages was 4.5 percent. Assume the relevant prescribed rate was 2 percent on this date. Olin purchases a house for $327,000 on October 2, 2020.
4. On his birthday, Olin received several gifts including a hoverboard and drone. In his enthusiasm for his new toys, he flew the drone over his neighbor's swimming pool while maneuvering the hoverboard on the sidewalk in front of the two homes to watch it. The result was a concussion, a broken leg, a shattered wrist and a drowned drone. He was unable to work for a period of two months. As his employer provides disability insurance coverage, he received benefits during this period totaling $8,500. All of the premiums for this insurance plan are paid for by the employer and totaled $560 for 2020. The plan provides periodic benefits that compensate for lost employment income.
5. Other disbursements made by Olin include the following: Olin's employer reimbursed for the tuition fees for both the operations management course and the medieval history course, as well as the fees paid to the financial planner.
6. Olin's employer made a payment to the group life insurance policy on his behalf. The premiums for 2020 totalled $200.
Required: Calculate Olin's net employment income for the taxation year ending December 31, 2020.

Question

Olin Packett has been employed for over 10 years by a large Canadian public corporation. He works in their Victoria office.
For the 2020 year, his gross salary is $75,000. While he does not receive commissions, he was awarded a bonus of $15,000 during 2020 based on his sales performance. One-half of this is paid in December, 2020, with the balance to be paid in February, 2020.
During 2020, Olin's employer withheld the following amounts from his gross wages:  Other Information
1. Olin is provided with a car that the company leases at a rate of $723 per month, including both GST and PST. The company pays for all of the operating costs of the car and these amounted to $4,200 during 2020. Olin drove the car a total of 33,000 kilometers during 2020, 27,500 kilometers of which were carefully documented as employment related travel. While he was in the hospital for 2 months (see Item 4), his employer required that the car be returned to company premises.
2. Olin was granted options to acquire 500 shares of his employer's common stock at a price of $31.00 per share 2 years ago. On the date the options were granted, the shares were trading at $29.50 per share. These options were exercised by Olin on February 16, 2020, when the shares were trading at $34.75 per share. Olin does not plan to sell the shares for at least 2 years.
3. In order to assist Olin in acquiring a new residence in Victoria, his employer granted him a three year, interest free loan of $175,000. The loan was granted on July 1, 2020 and, at this point in time, the interest rate on open five year mortgages was 4.5 percent. Assume the relevant prescribed rate was 2 percent on this date. Olin purchases a house for $327,000 on October 2, 2020.
4. On his birthday, Olin received several gifts including a hoverboard and drone. In his enthusiasm for his new toys, he flew the drone over his neighbor's swimming pool while maneuvering the hoverboard on the sidewalk in front of the two homes to watch it. The result was a concussion, a broken leg, a shattered wrist and a drowned drone. He was unable to work for a period of two months. As his employer provides disability insurance coverage, he received benefits during this period totaling $8,500. All of the premiums for this insurance plan are paid for by the employer and totaled $560 for 2020. The plan provides periodic benefits that compensate for lost employment income.
5. Other disbursements made by Olin include the following:  Olin's employer reimbursed for the tuition fees for both the operations management course and the medieval history course, as well as the fees paid to the financial planner.
6. Olin's employer made a payment to the group life insurance policy on his behalf. The premiums for 2020 totalled $200.
Required: Calculate Olin's net employment income for the taxation year ending December 31, 2020.

Quizplus · Accepted Answer

The Answer of Olin Packett has been employed for over 10 years by a large Canadian public corporation. He works in their Victoria office.
For the 2020 year, his gross salary is $75,000. While he does not receive commissions, he was awarded a bonus of $15,000 during 2020 based on his sales performance. One-half of this is paid in December, 2020, with the balance to be paid in February, 2020.
During 2020, Olin's employer withheld the following amounts from his gross wages:  Other Information
1. Olin is provided with a car that the company leases at a rate of $723 per month, including both GST and PST. The company pays for all of the operating costs of the car and these amounted to $4,200 during 2020. Olin drove the car a total of 33,000 kilometers during 2020, 27,500 kilometers of which were carefully documented as employment related travel. While he was in the hospital for 2 months (see Item 4), his employer required that the car be returned to company premises.
2. Olin was granted options to acquire 500 shares of his employer's common stock at a price of $31.00 per share 2 years ago. On the date the options were granted, the shares were trading at $29.50 per share. These options were exercised by Olin on February 16, 2020, when the shares were trading at $34.75 per share. Olin does not plan to sell the shares for at least 2 years.
3. In order to assist Olin in acquiring a new residence in Victoria, his employer granted him a three year, interest free loan of $175,000. The loan was granted on July 1, 2020 and, at this point in time, the interest rate on open five year mortgages was 4.5 percent. Assume the relevant prescribed rate was 2 percent on this date. Olin purchases a house for $327,000 on October 2, 2020.
4. On his birthday, Olin received several gifts including a hoverboard and drone. In his enthusiasm for his new toys, he flew the drone over his neighbor's swimming pool while maneuvering the hoverboard on the sidewalk in front of the two homes to watch it. The result was a concussion, a broken leg, a shattered wrist and a drowned drone. He was unable to work for a period of two months. As his employer provides disability insurance coverage, he received benefits during this period totaling $8,500. All of the premiums for this insurance plan are paid for by the employer and totaled $560 for 2020. The plan provides periodic benefits that compensate for lost employment income.
5. Other disbursements made by Olin include the following:  Olin's employer reimbursed for the tuition fees for both the operations management course and the medieval history course, as well as the fees paid to the financial planner.
6. Olin's employer made a payment to the group life insurance policy on his behalf. The premiums for 2020 totalled $200.
Required: Calculate Olin's net employment income for the taxation year ending December 31, 2020.

Olin Packett Has Been Employed for Over 10 Years by a Large