1. 2 Robert (Bob) Gibson is a commission salesperson for Industrial Horticulture (IH), a leading manufacturer of fertilizers and pesticides. During 2020 he earned a base salary of $95,000. Because of recent changes in the agricultural industry Bob only earned commissions of $12,000.  The following amounts were withheld from Bob’s pay by his employer:

Note 1:  IH has a company pension plan with the company and the employee making equal payments to the plan.

Note 2:  Bob is covered by a comprehensive disability plan which provides income during periods of disability.  The premiums for the disability plan are paid entirely by the employees of the company.  During the year Bob was forced to take eight weeks off due to an unfortunate auto accident.  He received $3,400 in disability payments during this period.  Bob has paid in a total of $1,600 since starting with IH.

Note 3:  Bob is covered by the company’s group life policy that will pay his family $250,000 in the event of his death.  Premiums for the plan are paid by the company at double the amount paid by the employee.

Other Information:

1. For Christmas, IH gave all of the employees of the company memberships in the Cheese of the Month Club. The membership has a fair market value of $200.

2. As his job requires a significant amount of driving, IH provided Bob with a car. From January 1^st to April 30^th Bob used the company Lexus LS 460, which had been purchased the previous year for $83,000.  He drove the Lexus a total of 36,000 km, of which 16,000 could be considered employment usage.  On May 1^st Bob was in a serious car accident and totaled the Lexus.  When he returned to work, on July 1^st, he was provided with a brand new Prius that the company was leasing for $380 a month, payments include $65 a month for insurance.  From July to December Bob drove the Prius a total of 32,000 km of which 30,000 could be considered employment usage.  All operating costs are paid for by the company.

3. During the year Bob incurred the following expenses related to his job as a commission salesperson, none of which were reimbursed by the company:

   1. Travel costs of $14,000, of which $2,500 was for meals while of the road.

   2. Client entertainment, consisting of tickets to sporting events, of $6,000

   3. Other promotional expenses of $2,000

4. During the year IH paid $1,200 for Bob to see a financial planner to discuss financial issues related to his retirement.

Compute Bob’s minimum net employment income for the year.

DETAILED ASSIGNMENT

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