QuestionQUESTION #3(25 MARKS):-In late 2020, Dr. Alfred Mann separated from his wife. Since May of 2006, Dr. Mann had been working as a public health consultant for the X Company. On April 30th.. 2021 he accepted a staff position at the Toronto General Hospital and moved directly from Niagara to Toronto on May 1st. 2021.On February 1st.2022, Dr. Mann asked you to prepare his 2021 tax return.He provided you with the following details:- Salary from the Niagara region……………………………………………………….$50,000 Deductions:- Income taxes………………………………………………$7,500 Canada Pension Plan contributions……………. 900 Employment insurance contributions…………. 200 Salary from the Toronto General Hospital………………………………………$150,000 Deductions:- Income taxes………………………………………………$35,500 Canada Pension Plan contributions……………. 2,000 Employment insurance contributions………….. 600 Registered pension plan contributions……………4,000 Group income protection premiums paid…….. 150 Group term life insurance premium……………… 90Additional Information:-i. On February 1st. 2021, the X Company had offered its employees the rights to purchase shares in the Company at an option price of $10.00 per share. On March 1st Dr. Mann purchased 50,000 shares when the market price per share was $15 per share. Then on April 1st., he purchased an additional 5,000 shares when the market value was $16 per share. On September 15th. he wanted to take a vacation to Europe and sold 10,000 of the shares when the market price was $19 per share.ii. On May 1st.,when Dr. Mann moved from Niagara to Toronto, the Hospital gave him a moving allowance of $10,000. They also loaned him $300,000 at 1% for the purchase of a condominium in Toronto. Assume that the fair market value of interest rates were Qtr.1- 4%; Qtr.2-3%; Qtr. 3-5%; Qtr. 4-2%.iii. When Dr. Mann was with the X Company, he was provided with a leased car by the employer. The employer had leased the car at $700 per month plus taxes. The operating expenses paid by the Company for this vehicle from Jan. 1st. 2021 to April 30th. 2021 were $2,850. For the four month period in 2021 when he was with the X Company he drove the car 5,000 kilometres for personal use out of a total of 15,000 kilometres.For the Toronto job, Dr. Mann was required to use his own car for business. He had bought his car in November of 2020 for $30,000 plus taxes. He took a loan of $25,000 for the purchase of the car. His operating expenses for gas, oil, licence and repairs totaled $2,600 in 2021. He drove the car 5,000 kilometres for business use out of a total of 20,000 kilometres for the year.iv. The hospital provided him with an allowance of $500 per month for the use of his car.v. Dr. Mann won $10,000 in a Hospital lottery.vi. He paid professional fees of $1,200 to the Medical Association of Canada.vii. He received a painting at Xmas from the hospital. The fair market value of the gift was $700.vii. The Hospital paid is membership at the Good Life Fitness centre of $2,000.Required:-Compute Dr. Mann’s 2021 employment income following the rules under S3 of the Income Tax Act stating any omissions from your calculation.LawSocial ScienceTax law ACC 540
