Question - Ms. Isabelle Cardin had a tumultuous year in 2014. She broke her engagement early in the year and quit her job. She moved to a resort area to take a waitress job and to start up a fitness instruction business. She has had the following items correctly calculated and classified as either inclusions, deductions or tax credits for the purposes of determining her taxable income and federal tax.
Inclusions:
Benefit received from Employment Insurance Program - $600
Board and Lodging Provided by employer during busy season of resort - $8,000
Bonus from resort employer - $500
Business revenue from fitness instruction fees - $2,000
Gratuities as a waitress - $12,100
Interest on Canada Savings Bonds - $775
Rental Revenue - $6,000
Salary Received as a waitress - $12,000
Taxable Capital Gain - $3,750
Retiring Allowance from Previous Employer - $800
Deductions, Losses, and Tax Credits
Allowable capital loss - $4,500
Capital cost allowance on fitness business equipment - $1,300
Capital cost allowance on rental building - $1,200
Charitable gifts tax credit - $26
Child Care Expenses - $1,800
Canada Pension Plan Contributions tax credits on employment earnings - $215
Medical Expenses tax credit - $9
Business expenses of earning fitness instruction fees - $900
Expenses of objection to a tax assessment - $65
Interest on funds borrowed to pay expenses of earning fitness instruction fees - $75
Maintenance on rental property - $1,100
Mortgage interest on rental property - $2,500
Moving Expenses - $1,700
Non-Capital Losses from previous year - $600
Personal Tax credit - $1,671
Property tax on rental property - $1,000
Employment Insurance Premiums tax credit - $92
Union Dues - $100
Canada Employment Credit - $169
You have been asked to:
(A) Determine the income, taxable income and basic federal tax based on the above correct information using the ordering rules in sections 3, 111.1, and 118.92. Assume federal tax before credits is $4,565 in 2014.
(B) Cross-reference each amount to the appropriate section of the Act.