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Problem Four A Comprehensive Tax Payable $(30$ marks$)$

Marvin Combs is $43$ years old and is employed by a Canadian public company with gross revenues of $$280$ million. His annual salary is $$112,468,$ none of which is commissions. Because of his outstanding work during $2023,$ he has been awarded a $$20,000$ bonus. The bonus will be paid in $2027$ and $2028$ at the rate of $$10,000$ each year to help ensure he stays with the Company. As Marvin expects to remain at the Company for the rest of his working life, he agrees to the delayed payment.

In $2023,$ his employer withheld EI premiums of $$1,002$ and CPP contributions of $$3,754.$ The employer also withheld professional association dues of $$3,400$ and donations to a registered charity of $$2,500.$ Marvin is required by his contract of employment to maintain his professional status.

The employer also withheld $$6,800$ of employee RPP contributions. The employer contributed $$6,800$ to the RPP on his behalf.

Marvin's spouse, Leslie Combs, $46$ years old and is legally blind. Her net income is $$8,460.$

The Combs have three children. Information for the three children is as follows:

Sharon is $17$ years old, in good health, and has net income from part time employment of $$7,625.$

Suzanne is $19$ years old and suffers from a physical infirmity that prevent her from working on a full time basis. She lives with Marvin and Leslie and has net income from part time employment of $$7,250.$

Samantha is $23$ years old and attends university on a full time basis for $11$ months of the year. Marvin pays the tuition fees of $$10,300,$ along with textbook costs of $$1,100.$ She lives with Marvin and Leslie and is in good health. She has net income of $$12,800$ all of which is from investments. The investments were purchased with income saved from part$-$time employment during her high school years.

Other Information:

$1.$ Marvin is provided with an automobile by his employer. The automobile is used largely for employment purposes. He drove $62,000$ kilometers in $2023,$ with $58,000$ for employment purposes and $4,000$ for personal use. The automobile is leased by the employer for $$456$ a month which includes $$43$ for insurance. The automobile is available to Marvin for $10$ months in $2023.$

$2.$ In $2020,$ Marvin was granted stock options to purchase $300$ his employer's common shares for $$72$ a share. At the time the options were granted, the FMV of the shares were $$70$ per share. In January, $2023,$ when the shares are trading at $$85$ per share, Marvin exercises all of the options. He still owns the shares at December $31,2023.$

$3.$ In $2023,$ Marvin receives several gifts from his employer:

$$ As a reward for winning the company's Employee of the Month Award, he receives an expense paid weekend in a local hotel. The regular price for this package was $$1,200.$

$$ As is the case for all of the company's employees on their birthday, Marvin received a $$600$ gift certificate for merchandise at a local department store. The gift certificate cannot be converted to cash.

$$ At Christmas, the company provides each employee with a basket of gourmet food. The value of this basket is $$450.$

$4.$ In $2023,$ Marvin spent $$8,400$ on meals and entertainment with clients of his employer at local restaurants and clubs. His employer reimbursed $$7,400$ of these expenses which all relate to clients. Marvin estimates that his own meal expenses were $$1,000$ none of which were reimbursed by the employer.

$5.$ In $2023,$ Marvin and Leslie decide to purchase their first family home $($they have rented for the last $15$ years$).$ After considerable searching, they identify the perfect property one block from their rented apartment and purchase it for $$662,000.$ Consistent with company policy he requests and receives an interest free loan of $$200,000$ to assist with this purchase. The loan was received on April $1,2023.$ Assume that the prescribed interest rate on employee loans is $2\%$ throughout all of $2023.$

$6.$ In $2023,$ both Sharon and Samantha had surgery. Marvin paid $$2,800$ for emergency services after Sharon's nose suffered serious trauma during a martial arts class. He also paid $$13,500$ for cosmetic surgery for Samantha. These amounts are included in the following medical expenses of the family, all of which were paid by Marvin:

Marvin and Leslie $ $2,200$

Sharon $3,100$

Suzanne $12,300$

Samantha $16,000$

Required:

A$.$ Determine Marvin$$s minimum employment income and net income for $2023.$

B$.$ Determine Marvin$$s minimum taxable income for $2023.$

C$.$ Based on your answer in Part B$,$ determine Marvin$$s federal income tax payable for $2023.$

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