Appendix. Consolidated case study: Mr. Goodenough

• Author: Vern Krishna
• Pages: 322-332

322

INCOME

TAX LAW

CASE

STUDY:

Mr.

Goodenough,

Part

A

The

following information applies

to Mr.

Goodenough,

a

lawyer, employed

by a

technology

firm,

Lapline Inc.

Taxation

Year

1996

Part

A:

Employment Income

Salary

$150,000

Stock options realized

from

CCPC shares

owned

for

three years $25,000

Under

the

terms

of

Goodenough's

employment contract,

he is

required

to

pay his own

expenses. During

the

current year

he

incurred

the

fol-

lowing

costs

in

connection

with

his

employment

at

Lapline Inc.:

Accounting

fees

$2,000

Tickets

and

entrance

fees

to

entertain clients $600

Entertainment

and

client meals

$1,770

Hotels

and

accommodation $2,450

Home

office

costs (see below

for

details) $7,700

Personal

portion

of

home

office

costs

80%

Goodenough drives

a BMW

(convertible), which

he

uses

for

work

and

pleasure.

The

following

pertains

to his

automobile expenditures

and

usage:

Date

purchased 1996

Cost

of

automobile $45,000

GST

and PST

$6,750

Kilometres

driven

for

7,000

employment purposes

in the

year

Total

kilometres driven 20,000

during

the

year

Automobile expenses: gas, maintenance,

and

repairs

$2,650

Insurance 1,800

Registration

100

Interest

and

finance

charges 3,600

Capital

cost allowance (see Schedule

1.1)

4,140

Total

automobile expenses $12,290

Legal

expenses

to

recover salary

from

previous employer

$4,500