Reference no: EM132789230

Question - Bob Neat is the sole shareholder and only employee of Bob's Bookkeeping Services Ltd., a Canadian controlled private corporation with a December 31 year end. The Company provides on-site Bookkeeping services to a number of clients in the greater Toronto area. As Bob must travel extensively to service clients, the Company provides him with a vehicle to be used in his work. As Bob does not personally own a vehicle, he also uses the vehicle for personal travel. During 201, tow different vehicles were provided:

Ford Focus: During the period January 1, 2019 through April 30, 2019, Bob had use of a Ford Focus that had been purchased in 2018 for $23,600. As of January 1, 2019 the Class 10 UCC balance was $20,060. During this period, Bob drove the care a total of 31,000 kilometers, 18,000 of which related to his work for the Company. On April 30, 2019, The car was sold for proceeds of $18,200.

Mercedes E-Class Sedan: As the business was becoming very profitable, Bob decided he deserved a better equipped and more comfortable vehicle. On May 1, 2019, the Company acquires a Mercedes E-Class sedan for $52,000. During the period May 1 through December 31, 2019, Bob drives the car a total of 42,000 Kilometers, 23000 of which involved personal activities.

These were the only vehicles owned by Bob's Bookkeeping Services during 2019. Bob had one of these vehicles available to him at all times during 2019.

Throughout 2019, the Company paid for all of the operating costs of both vehicles, a total of $17,460.

Required - Determine the following:

A. The tax consequences to Bob's Bookkeeping Services Ltd. that result from owning and selling the Ford Focus and owning the Mercedes E-Class sedan during 2019.

B. The minimum amount of the taxable benefit that Bob will have to include in his Net Income for Fax Purposes for 2019. Ignore HST considerations in your solution.