Assignment Task
Client Information
Bridget Blumer is employed as the Vice President of Customer & Community Relations for Natural Pods Inc. (NPI), a Canadian controlled private corporation (CCPC). NPI designs, manufactures, and distributes environmentally responsible furniture for educational . All furniture is recyclable, compostable, and locally manufactured and made with Forest Stewardship Council certified materials. Offering over 250 furniture items, NPI has created over 15,000 educational space layouts in Canada, the U.S., and across Europe and Asia.
Bridget has requested your assistance in preparing her 2023 personal income tax return and advice on certain other tax matters.
Information regarding Bridget’s financial activities for 2023 is outlined in Exhibit A-1. Selected information from her 2022 tax return is provided in Exhibit A-2.
Required
Using Excel, submit the following:
Calculate Bridget’s minimum net income for tax purposes in accordance with the ordering provisions found in section 3 of the Income Tax Act, and her minimum taxable income for the 2023 taxation year.
Based on your answer to part (a), calculate Bridget’s minimum federal income tax for the 2023 taxation year. Show all
In a Word document, a one-page memo presenting the main issues related to the tax results, including the identification of and discussion about, the determination of the various sources of You will need to determine what is important for future tax planning purposes and/or for your client to know and understand. This is where you are expected to demonstrate your understanding of the more important personal tax provisions that you feel may impact your client the most.
Exhibit A-1
In 2023, Bridget received a salary of $155,000. From this income, NPI deducted income tax of $19,000, Canada Pension Plan contributions of $3,754 and $1,002 of Employment Insurance premiums. The company contributed $500 to a group term life insurance premium and $3,500 to the company’s deferred profit-sharing plan. The company also contributed $2,500 to its registered pension plan on Bridget’s behalf; Bridget made a matching contribution of $2,500.
Bridget received a discount of 50% on products purchased through the She estimated that the discount saved her $1,500. This discount is only available to senior management of the company.
She attended a one-day convention related to her job. NPI paid $600 for the cost of the She also attended an internal sales conference arranged exclusively for the sales department. Each participant was given a $25 retail store gift card.
Bridget meets potential clients on a frequent basis. NPI paid her $2,500 as a clothing She spent $5,000 on new clothing during the year
Bridget is required to use her own automobile for employment purposes. Her employer has signed a T2200 for her in this respect. She was given $2,000 as an auto allowance in 2023. She travelled a total of 20,000 km, of which 9,000 km were for employment Her total operating cost for this year was $4,000 and on December 31, 2020, the undepreciated capital cost allowance balance was $10,000.
She received a dividend of $1,000 from the active business income of She also received $1,800 (net of $200 withholding tax) from a U.S. company. She paid $200 to an investment advisor for advice regarding an RRSP investment.
She sold a collection of stamps for $2,500 on October 1, 2023. She won this collection in a lottery in 2015. The fair market value of this collection was estimated at $800 at the time of She also sold some antique jewelry to a good friend for $1,500. She inherited it from her great aunt many years ago.
Bridget started a consulting business as a sole proprietor in 2023. Her clientele consisted of corporate organizations looking to redesign their meeting spaces used for professional development and in-office events. Her gross revenues for this business were $25,000 and operating expenses were $5,000. Her other expenses included a golf club membership fee of $2,000 to find potential clients and $3,000 home office expenses related to the business. She used a portion of her house as her principal place of business.
Carry Forwards Summary
From 2019
To 2022
Listed personal property losses
$1,100
$1,100
Capital Gains deduction used for qualified farm property/small business
$75,000
$75,000
Non-capital losses
$2,500
$2,500
Registered Retirement Savings Plan:
Deduction limit from previous year’s Notice of (Re) assessment
Maximum RRSP deduction limit for 2023
$15,000
$15,000
