Matilda Bracken is a Certified Financial Planner (CFP) with many years of successful experience.

Hi there,

Can you please provide me the answers of the following

Ms. Matilda Bracken is a Certified Financial Planner (CFP) with many years of successful experience. In 2015, she decided that she was not adequately appreciated in her current position with a large financial institution in Windsor, Ontario. Given this, she resigned on November 1,2015.

After several months of investigation, she decided to take a position with Retirement Planners Ltd. (RPL), a Canadian controlled private corporation located in London, Ontario. She commenced working for RPL on May 1, 2016.

She owned a home in Windsor which she had acquired several years ago for $375,000.

Because of the depressed real estate market in this area, she was eventually forced to sell the

property for $275,000, resulting in a $100,000 loss on this property.

Because of the uncertainty surrounding the sale of her Windsor property, she moves into an

apartment when she arrives in London on May 1, 2016. The apartment is rented on a monthly

basis until November 30, 2016. After she accepts an offer to purchase her Windsor house, she finds a home in London that she purchases on November 1, 2016 for $420,000. She moves into this new home on December 1, 2016. Matilda's new job requires her to meet with clients outside of regular office hours, seven days a week. She has set aside space in her home to be used exclusively to meet with clients. RPL will sign form T2200 stating that she is required to pay for certain employment expenses without reimbursement and use a portion of her home for work. Matilda is also provided with an automobile to use in her work.

Matilda is compensated by salary with a bonus and stock option arrangement. The bonus is

based on overall company profits. The stock option is available to all employees depending

upon level of service and overall job evaluation.

Other Information:

1. Because of her strong professional reputation, RPL paid her a signing bonus of $12,000.

The signing bonus was paid on June 1, 2016.

2. During the period May 1, 2016 through December 31, 2016, Matilda earned salary of

$124,000. Of these earnings, $120,125 was paid during this period with the remainder

paid in the first pay period of 2017. The Company withheld the following amounts from

her salary:

Income Taxes $18,650

CPP 2,544

EI   955

RPP Contributions 3,700

Payment For Personal Use Of Automobile 880

3. RPL contributed $3,500 on Matilda's behalf to the Company's RPP.

4. RPL provides group medical coverage to all of its employees. The private health plan

premiums paid by RPL on Matilda's behalf cost $562.

5. On December 12, 2016, a bonus of $10,600 was accrued for Matilda. Matilda received

$5,300 of this bonus on December 29, 2016, with the remainder being paid on January

17, 2017.

6. As was RPL's policy, Matilda received non-cash gifts during the year. The total value of the gifts was $650.

7. Because of the need to invest some of her additional income, RPL provided Matilda with

financial counseling services. The value of these services was $1,200.

8. In order to assist her move, RPL agreed to compensate her for one-half of the $100,000

loss on the sale of her Windsor home. The $50,000 payment was made on December 1,

2016.

9. RPL has a stock option plan for its employees. Under this plan, employees are permitted to

acquire a limited number of option shares at 10 percent below their fair market value on

December 1 of each year. The company hires valuators to determine the fair market

value at each of those dates. Matilda acquires 200 shares on December 1, 2016 for cash of

$7,200. On December 15, she sells 100 of these shares for $4,100.

10. Matilda paid $1,600 in CFP dues in 2016. RPL's policy is to reimburse 50 percent of such professional dues. RPL reimbursed her $800 in December, 2016.

11. RPL provides its professional employees with a membership in the London Curling Club.

They believe this is a useful venue for entertaining clients of the Company. The cost of this

annual membership was $1,300.

12. In order to help Matilda with financing her new London residence, RPL provided her with a $220,000 interest free housing loan. The funds are provided to Matilda on November 1,2016. Assume that the prescribed rate for all of 2016 is 2 percent.

13. Matilda received an allowance of $325 per month for eight months to cover the costs of

maintaining an office in her home.

14. RPL provides Matilda with a vehicle that was purchased in 2016 for $45,200, including

HST. The vehicle was used by Matilda for all months during the period May 1, 2016

through December 31, 2016. During this period, she drove the vehicle a total of 52,000

kilometers, of which 40,000 were related to her employment duties. RPL pays all operating and maintenance costs, a total of $8,900 during the period that Matilda used the car.

RPL withheld $110 per month from her salary to pay for her personal use of the vehicle.

15. Matilda used a separate room in her apartment exclusively as a home office. She used this office space between May 1 and November 30, 2016. This home office occupied 150

square feet of the 1,250 square feet available in her apartment. The home office in the

residence she moved into on December 1,2016 will not be available for use until 2017.

Home office related costs are as follows:

Monthly Rent $2,200

Office Furniture 3,400

Computer Purchase 896

Stationery And Office Supplies Purchased 147

Monthly Phone Line Charge (For 7 Months) 210

Employment Related Long Distance Calls (For 7 Months) 110

Electricity Charge (For 7 Months) 350

Paint For Apartment 165

Property Insurance (7 Months) 175

Required:

Determine Matilda's net employment income for 2016.