Ed Signs was transferred from England to Ottawa by Supplies Inc. on
April 1, to assume the permanent position as Vice President, Canadian operations. Ed was
a permanent resident of England prior to the move. His earnings for the year are as follows:
|
Gross salary — January 1 to March 30 |
$ 12,000 |
|
Income tax paid in England . . . . . . . . . |
(3,200) |
|
Gross salary — April 1 to December 31 |
$ 62,000 |
|
Income tax withheld . . . . . . . . . . . . . . . |
(21,000) |
|
CPP/EI withheld . . . . . . . . . . . . . . . . . . |
(2,100) |
|
Donations to United Way withheld . . . . |
(400) |
Ed’s spouse, Laura, arrived in Ottawa on July 15, with three children (all over six years of age). On August 1, she resumed her full-time studies at the University of Ottawa, where she was awarded a
$500 scholarship. In England, she had attended the University of Cambridge from January 1 to April 30. In England, Laura paid $1,000 per month for a nanny for the children. In Canada, she took her children to the local daycare for $1,360 per month. The Signs also incurred the following moving expenses:
|
Airfare/lodging — house hunting in Ottawa . . . . . . . . . . . . . . . . . . . . . . . . |
$3,500 |
|
Airfare — family move . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
7,000 |
|
Moving van fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
3,200 |
|
Legal fees and land transfer taxes on acquiring the Ottawa home . . . . . . . |
5,500 |
|
Meals and hotel expenses (12 days prior to employment) . . . . . . . . . . . . . |
3,800 |
Required:Ed is having some problems in calculating his and Laura’s income for Canadian tax purposes, and has come to you for assistance. He has asked you to calculate his income for tax purposes.
