Canadian Income Taxation, 2018/2019, 21st Edition Solution Manual

Canadian Income Taxation, 2018/2019, 21st Edition Solution Manual is the perfect textbook guide, offering thorough solutions to all your textbook exercises.

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Buckwold and Kitunen, Canadian Income Taxation,2018-2019Ed.Solutions Manual Comprehensive Cases1COMPREHENSIVE CASE SOLUTIONSNOTE:The cases related to these solutions are onConnect.They are not printed in the text.Solution to COMPREHENSIVE CASE ONEComparison of two employment offers received by John Smith1)Offer of employment from ABC Co.a.Salaryof $45,000 is included in income when received [ITA 5(1)]b.Stock option: The option is “in the money” at the date of grant; exercise price =$20;value at grant date = $25.If ABC Co is not a Canadian-controlled private corporation (CCPC):•there will be an employment income inclusion on the exercise date tothe extent the value at the exercise date exceeds $20 [ITA 7(1)]•the stock option deduction will not be available [ITA 110(1)(d)]•John will have a capital gain or loss on the disposition of the sharesbased on the difference between the selling price and the value at thedate of exerciseIf ABC Co is a CCPC:•theemploymentincomeinclusionisdeferreduntilthedateofdisposition [ITA 7(1.1)]•if John does not dispose of the ABC Co shares within two years afteracquiring them, John is entitled to the stock option deduction which isequal to ½ of the stock option employment benefit [ITA110(1)(d.1)]•John will have a capital gain or loss on the disposition of the sharesbased on the difference between the selling price and the value at thedate of exercisec.Home purchase loan: John will have an imputed interest benefit included in hisemployment income. The benefit is calculated by multiplying the loan principalby the prescribed rate of interest. The benefit is reduced by the 1% interest paidby John, provided the interest is paid by 30 days after the end of the calendaryear.If the prescribed rate increases, the loan benefit will continue to be calculatedusing the 2% prescribed rate in effect at the time the home purchase loan wasreceived (for a period of five years) [ITA 80.4].d.Private health services plan: The annual premium for prescription drugs, dental,and vision coverage does not result in a taxable benefit [ITA 6(1)(a)].

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Canadian Income Taxation by David R...

Canadian Income Taxation, 2018/2019, 21st Edition Solution Manual

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