skip to Main Content

Employment Income Review Problem It is September 1st and your third-year univers

Please note that this is just a preview of a school assignment posted on our website by one of our clients. If you need assistance with this question too, please click on the Learn More button at the bottom of the page to get started.

Employment Income Review Problem
It is September 1st and your third-year university roommate Goerge understands you recently completed a tax course and would like your help with his 2019 tax return.
During the 2019 school semesters he was employed by Locals’ Only Pub (“LOB”) where he earned a salary of $20,000. He also earned $3,000 in tips and won $4,000 in the staff’s weekly post Saturday closing poker game. LOB’s owner was concerned that Goerge may have been developing an addiction problem and paid $2,000 for him to participated in a counselling and well-being retreat. A couple months later and Goerge no longer appeared on the schedule and a $2,500 in wages was unpaid. Goerge hired a lawyer and paid $500 to collect the unpaid wages and $1,000 to defend against an assault charge that followed a poker game. Goerge misses working at LOB as he could also eat meals there for ½ price, basically the cost of the food, and he figures this saved him $750 per month. LOB, as part of its support a student program, also paid for one of his courses at a cost of $1,000. 
During the summer, May 1st to August 31st, Goerge was employed by a Drop Cloth Paints Inc. (“DCPI”), a manufacturer of paints and specialty coatings. He was provided with a station wagon which he drove 12,000kms for work and 4,000kms for personal use. The new cost of the wagon was $38,000 but Goerge figured its market value would presently be about $18,000. He paid DCPI $100 per month to cover his use of the wagon.
He earned $14,000 in salary and $6,000 in commission. In the course of his employment he incurred the following expenses:
· Metal working course to meet clients $ 1,500
· 4×4 off-road club to meet clients $ 250
· Evenings out with prospective clients at trade shows $ 2,000
Goerge also purchased a $1,000 smart phone and a $60 per month plan, he did not exceed the plan limits and used the phone ~80% for work.
As part of its employees of the future program, DCPI issue 1,000 options to each student who held a summer job. In mid December, to fund his winter vacation, Goerge exercised all the options and sold the shares. He purchased the shares for $8, sold them for $10 and the shares had a fair market value of $7 when issued.
Calculate Goerge’s (focus on presentation):
· Net Income for Tax Purposes
· Taxable Income
· Total Credits
· Tax Payable
· Why you included or excluded items from your calculations
· Areas where you made assumptions
· What additional information may change your calculations

Get Help Today

Struggling with this particular assignment? Learn how our team of professional writers can help you today.

Leave a Reply

Your email address will not be published. Required fields are marked *