Charles Bartello intends to leave Canada and start a new life in southern Florida. Before leaving, he intends to dispose of all his property so that he will have sufficient capital to acquire a business in the United States.
Bartello has provided the following information:
1. He currently owns 40% of the shares of a Canadian small business corporation, which are valued at $70,000. The shares were purchased four years ago for $100,000. Bartello is employed by the corporation and anticipates that his salary up to the date of departure will be $75,000.
2. At the beginning of the current year, he purchased a rental property as an investment. To date, the property has provided rental revenue of $14,000; however, Bartello has incurred cash expenses for property taxes, maintenance, interest, and insurance of $17,000.At the same time, the property has appreciated in value by $12,000.When he purchased the property, Bartello was not yet thinking of leaving Canada.
3. Three years ago, Bartello loaned $10,000 to a small business corporation owned by a friend. The business has suffered serious losses, and he has little hope of being repaid. In addition, no interest has been paid on the loan, although in the past two years Bartello has included interest in income for tax purposes on the anniversary dates. The total interest included is $2,000.
4. His home is worth $180,000 (original cost, $150,000.) He has owned the home for eight years and has lived in it all that time.
5. Bartello owns the following additional properties:

Required:
1. Determine Bartello€™s net income for tax purposes for the year in which he leaves Canada.
2. Would Bartello€™s net income change if he left Canada, still owning the above mentioned assets? Explain.€

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Cost Value Motorboat Furniture Shares of public corporation X Shares of public corporation Y Corporate bond Art collection Stamp collection Grand piano $ 14,000 10,000 6,000 14,000 15,000 100,000 102,000 3,000 16,000 14,000 21,000 10,000 50,000 600 20,000 10,000