Acct 385 Final

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Department of Career & Professional Development

WINTER 2012

FINAL EXAMINATION

| | | | | STUDENT NAME | | STUDENT NUMBER |

Taxation I
CCTX 511

|Lecturer: | Larry Goldsman, C.A. | |Date: | April 24, 2012 | | | | |Time: |6:00pm – 9:00pm |

THIS EXAMINATION IS PRINTED ON BOTH SIDES OF THE PAPER.

Instructions:

-This is a closed book exam.
-The Income Tax Act is allowed.
-You are allowed a 1 page (8 ½ x 11) index sheet
- You are allowed dictionaries.
- Only non-text storing calculators are allowed
- This exam consists of 3 questions
- Total number of pages including cover sheet: 9
- Answer all questions in your exam booklet

THIS EXAMINATION PAPER MUST BE RETURNED

Question 1 (45 marks - 81 minutes)

John Winded celebrated his 65th birthday on February 14, 2011. On February 28th, 2011, John retired from Celebrate Ltd., a public corporation after 35 years of service. John’s annual remuneration was $84,000. A review of his last pay stub reveals the following deductions:

CPP contributions$700
EI premiums200
RPP contributions500
Employee premiums to the company dental & health plan150

John also had the use of a company for January and February. The car was leased at a monthly rate of $360. Celebrate also paid the $800 in automobile operating expenses. John drove a total of 3,000 kms., 90% of which were personal.

As a token of their appreciation for John’s dedicated service, the company gave him a watch that cost $700.

Since John wanted to live in the Vancouver area once retired, he asked his employer to transfer him from their Winnipeg to their Vancouver office, effective January 1, 2011. He incurred the following moving expenses:

| | |Date incurred | |Air fare for John and his spouse for trip to Vancouver to find a home |$900 |Nov. 2010 | |Hotel for four days in Vancouver for purposes of finding a new home |800 |Nov. 2010 | |Meals while in Vancouver for purposes of finding a new home |320 |Nov. 2010 | |Car rental while in Vancouver for purposes of finding a new home |325 |Nov. 2010 | |Air fare for John and his spouse to Vancouver |1,200 |Jan. 2011 | |Legal fees and commissions on sale of old home (sold in January 2011) |13,000 |Jan. 2011 | |Cost of transporting furniture and other household goods from Winnipeg to Vancouver |4,000 |Jan. 2011 | |Legal fees and land transfer taxes on purchase of new home |4,800 |Dec. 2010 |

Mr. Winded has kept all of his receipts with respect to his moving costs.

Mr. Winded made sure he acquired the allowable number of shares under the company stock option plan prior to his retirement date. On February 1, he acquired 1,500 @$8, when the shares were trading for $11. When the option was granted, the shares were trading for $7. Mr. Winded sold 1,000 of the 1,500 shares in June of 2011 for $17/share. Mr. Winded did not own any other shares of Celebrate, other than...
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