2. Joan Allenby has owned her home for many years and, over this period of time, has completely paid off the mortgage. Given the low interest rates that are available on mortgages, she negotiates a $300,000, five year, variable rate mortgage, with an interest rate of 2.5 percent. She invests the entire $300,000 in publicly traded securities. Would the interest on the mortgage be deductible? Explain your conclusion. 3. Stephen Lee has an unincorporated business that he anticipates will have active business income of $98,000 for the taxation year ending December 31, 2019. Mr. Lee has employment income in excess of $800,000 with additional amounts subject to a provincial tax rate of 16 percent. The provincial dividend tax credit is equal to 4/13 of the dividend gross up for non-eligible dividends. Also in this province, the corporate tax rate is 3 percent on income eligible for the small business deduction and 15 percent on other income. Mr. Lee has asked your advice as to whether he should incorporate this business. Advise him with respect to any tax deferral that will be available on income left in the corporation and on any tax savings that will be available if all of the income is paid out in dividends.