Ch$.19/$Study Guide $-$ Assignment Problems

Drawings:

Other Information

$(1)$ Isabelle is single, and has interest income of $$2,500$ for the year $2023.$

$(2)$ Samara has interest income of $$6,600,$ and has made an RRSP contribution in $2023$ of $$2,700$

$($her $2022$ earned income was $$15,000).$

You have agreed to do the following:

$(1)$ Compute the partnership income for the year ended December $31,2023,$ and the income to be

allocated to the partners.

$(2)$ Advise on the tax consequences to Samara and Isabelle as a result of the disposition of their

partnership interests in $2024.$ Compute Samara's and Isabelle's capital gain on the disposition of their

partnership interests on January $1,2024.$

$(3)$ Compute Samara's and Isabelle's taxable income and tax payable for $2023$ using the hypothet$-$

ical provincial tax rate table presented in Chapter $10,$ $$10,250.$Problem $4$

About five years ago, Isabelle, Eden, Samara, and Joy formed a partnership to carry on a snow

removal and landscape business. All the partners, except Isabelle, made an initial contribution of

$$50,000.$ Isabelle made an initial contribution of $$90,000.$ Each agreed to share in the profits and losses

of the business as follows: $20\%$ to each of Samara, Joy & Eden and $40\%$ to Isabelle based on contribu$-$

tions of capital and labour to the partnership. At the end of the $2023$ fiscal year of the partnership,

Isabelle and Samara decided to go their separate ways. On January $1,2024,$ Samara received $$125,000$

for her partnership interest, while Isabelle received $$250,000.$ The tax records for the five years ended

December $31,2022$ reflected the following cumulative amounts:

Income $($before capital gains$)$ from operations for tax purposes $...........$ $$750,000$

Losses $..$

Capital gains $($to $2022)$

$80,000$

Drawings by the partners

$10,000$

Charitable donations $($added back to Division B income for tax purposes$)$

$730,000*$

$15,000$

ITA: $53(1)(e),53(2)(c)$

ITA: $53(1)(e),53(2)(c)$

$.$

Financial results for the year ended December $31,2023,$ are as follows:

Net income per financial statements $...$

$($Vitraqoag

Charitable donations $($deducted from accounting income$).................2,000$