Understanding Taxable Benefits: Housing Loans, Travel, and More
School
York University**We aren't endorsed by this school
Course
MGM 101
Subject
Law
Date
Dec 11, 2024
Pages
16
Uploaded by SuperInternetLoris13
4-P5
Housing loan- home loans deemed to be reneMoving costs-Would be taxable benefit, CRA s1Directors feeSpouse travel pay2Personal use of automobile- operating benefit: $0.33 * perso-Standbycharge: 2/3 * lease pmt3Term life insurancePrivate health plan4Deferred profit sharing plan (DPS5Bonus plan- 75% of award will be paid in the- remaining 25% will be taxable -annual investment income is tax6Allowance- taxable benefit - (prescrbied ra- at time loan was entered into - - If remuneration for loss on sale- As Canadian resident, will be ta- Taxable benefit - (not for emplo- taxable benefit (specific provisi- specific exception(ITA) - not a t- Contributions/returns on invest- only taxable when paid out (de- Ordinary remuneration, taxable-general allowance - fully taxable
Travel expense reimbursement- (8(1)(h))7Stock options- WPI is public company, Not ITM- stock option deduction availabl- $250,000 LIMIT on deduction du- Grant date - no taxable benefit- Exercise date (depends on prud- @ grant date:- @ future:- Exercised within 3 yeTaxable beSODTaxable emCG - tax payer is theoretically neutra8Club dues- Since travel expenses are for b- Taxable benefit (general rule)- under certain circumstances (n
Once receiewed every 5 yearssaid its not ( S2-F3-C2)onal km6600t * months avail6800TOTAL13400SP)e following yearin 5 years (deferred)xable annuallyate - actual interest paid on loan)* loan amountrate stays (no upside risk)e of house, then tax freeaxable on worldwide incomeoyer's benefit)ion in ITA)taxable benefittment are tax freeeferred)e when paid in cash (cash basis for Emp inc)e (transportation allowances not fully taxable)
M (cost @ grant = FMV @ grant)le (1/2 of taxable benefit)ue to increase in CGIR (draft legislation)dence) taxable benefit (FMV - strike = 0)0: CG when shares are sold (cost base $12)1ear period (FMV = $14)enefit ( FMV > exercise price)2 per share1mp inc10al ( $1 TCG or $1 emp inc)business purposes, not taxable benefitnon taxable), " principally for employer's advantage"
ived
Salesperson + Shipping supervisor
1.Income from employmentSalary - day job125000Salary - real estate8000Commissions7000Taxable benefitGroup term life insurance prem1200Summer camp400 =600-200Standby charge (employer)8400 =2%*35000*12Operating benefit5544 =0.33*16800 perSpouse travel cost1000Travel alloance2400Deducitons:Union dues-600RPP employee contribution-3000Sales expense-7000Basic cell phone plan-240CCA (car- Class 10 => 30%) (prorate @ 27000/30000-2700TEI145404ExclusionsIncome tax-> not relevant inCPP-> tax credit, redEmployment Insurance premium-> tax credit, not Donations-> tax credit, not CPP/ EI by employerRPP by employer-> excluded as a Employee paid coperating costs for vehicle, ignoredDiscounted retaill merchSeminar (to be effective salesperson)-> capital nature Personal meals-> not deductiblePurchase of cell phone-> capital in natuTEI-> tax free benefi-> CRA prescribes
Note 1:Real estate selling expensesOption 1: 8(1)(f) - most selling expenses, LIMIT: commssionDues for local relaestate association400Seminar (to be effective salesperson)0 -> capital nature Advertising (calendars and pens)1700Auto operating costs3600 =4000 * (27000/3Meals & entertainment1400TOTAL deductible expenses:7000 >3600Option 2: 8(1)(h)(h.1) - car and travel expenses NO LIMITDues to association0Seminar0Advertising0Auto operating costs3600Meals and ent03600 <7000Note 2:Details abt taxable vs non-taxable allowanceTravel allowances are not taxable, unless the amt is "unreasonable"Reasonable typically means the allowance is based on km for emp urposeTherefore, not, reasonable - allowance is not based pon a metricSince the amt is therefore taxable we can deduct expenses related to vehicle
-> non-cash benefit not for employment-> purchasedrsonal KM-> if reasonable, then it would not have been taxablen computing incomeduces tax liability. Not deductible, or involved in computing Enc inc. CPP 2 deductible budedutible expensedeductible expense from emp inctaxable benefitdue to enduring benefit of seminare, Only deductible if >12 outside municipalityure, depreciates over time. Individuals can only claim CCA on car or aircraft, only businefit (ITA)s exclusion, would normally account as a taxable benefit. UNLESS discount < employer
due to enduring benefit of seminar30000)-> arbitrary car allowance ($2400)
ut not as emp incesses camr cost