Tax 1
Question 4 (22 marks)
You, a CGA, are given the following information regarding Stoiche Anders.
a. Stoiche Anders is 49 years old and is married to Dimmi. Stoiche has been employed by Fasco Ltd. for a number of years as an engineer. His salary for 2011 was $168,898 as shown on his T4.
Amounts paid by Fasco Ltd. on behalf of Stoiche and not included on his T4 are as follows:
• Retirement counselling fee $ 1,800
• Employer contributions to the company’s Registered Pension Plan $ 675
• Reimbursement of Stoiche’s tennis club dues
(including taxes) $ 1,475
Fasco Ltd. provided Stoiche with an automobile and paid the operating costs for the entire year, totalling $4,250. Fasco Ltd. purchased the automobile on January 1, 2011, at a cost of $14,000 including taxes. In 2011, Stoiche drove 20,000 kilometres, 15,000 of which were for personal use.
In 2011, his wife travelled with him to Montreal when Stoiche attended a five-day seminar for engineers. Fasco Ltd. reimbursed him for the full cost of $8,000. Of this amount, $1,700 including taxes was for expenses incurred by his wife.
b. Stoiche also operates a small electrical parts distribution business. He has one employee. The fiscal period of the business ends on December 31.
Stoiche’s business is located in a leased warehouse. The lease expired in 2011. He negotiated a new lease on the warehouse with his landlord; the lease has a term of 5 years with one option to renew for an additional 5 years. The lease period commenced on March 14, 2011. Cost of the leasehold improvements was $77,000.
As part of his business expansion activities, Stoiche acquired a franchise with an indefinite life on March 1, 2011. The cost of the franchise is $10,000.
c. Stoiche purchased a commercial rental property on December 5, 2011. The costs of the property were as follows:
i. Land, $200,000 ii. Building, $500,000 (Class 1)
The rental income and expenses from December 5 to 31, 2011, were as follows: iii. Rental income,
You, a CGA, are given the following information regarding Stoiche Anders.
a. Stoiche Anders is 49 years old and is married to Dimmi. Stoiche has been employed by Fasco Ltd. for a number of years as an engineer. His salary for 2011 was $168,898 as shown on his T4.
Amounts paid by Fasco Ltd. on behalf of Stoiche and not included on his T4 are as follows:
• Retirement counselling fee $ 1,800
• Employer contributions to the company’s Registered Pension Plan $ 675
• Reimbursement of Stoiche’s tennis club dues
(including taxes) $ 1,475
Fasco Ltd. provided Stoiche with an automobile and paid the operating costs for the entire year, totalling $4,250. Fasco Ltd. purchased the automobile on January 1, 2011, at a cost of $14,000 including taxes. In 2011, Stoiche drove 20,000 kilometres, 15,000 of which were for personal use.
In 2011, his wife travelled with him to Montreal when Stoiche attended a five-day seminar for engineers. Fasco Ltd. reimbursed him for the full cost of $8,000. Of this amount, $1,700 including taxes was for expenses incurred by his wife.
b. Stoiche also operates a small electrical parts distribution business. He has one employee. The fiscal period of the business ends on December 31.
Stoiche’s business is located in a leased warehouse. The lease expired in 2011. He negotiated a new lease on the warehouse with his landlord; the lease has a term of 5 years with one option to renew for an additional 5 years. The lease period commenced on March 14, 2011. Cost of the leasehold improvements was $77,000.
As part of his business expansion activities, Stoiche acquired a franchise with an indefinite life on March 1, 2011. The cost of the franchise is $10,000.
c. Stoiche purchased a commercial rental property on December 5, 2011. The costs of the property were as follows:
i. Land, $200,000 ii. Building, $500,000 (Class 1)
The rental income and expenses from December 5 to 31, 2011, were as follows: iii. Rental income,