In $2023,$ Sophie Brown $($marital status: single$)$ had employment income of $$95,000$ from a large Canadian

public company that has annual gross revenue of $$600$ million. She is granted access to a stock option

plan in November $2022$ where she can acquire $15,000$ shares of the company for $$25$ each beginning in

$2023.$ The FMV of the shares at the time of the stock option plan is granted is $$20$ each. Sophie purchases

all $15,000$ shares of the stock option plan for $$25$ in March $2023$ when the shares are trading for $$28.$

Sophie then sells all of the shares for $$30$ in February $2024.$

In addition, she had the following income in $2023.$

Taxable capital gain $($not from option stocks$)$ $$12,000$

Unrestricted farming income $$9,000$

Limited partnership income $$5,000$

Sophie approached to you for tax advises. After interviewing her, you explored that she had some loss

carry forward balances from $2022$ as follows:

Loss carry forward balances on December $31,2022$

Taxable capital loss $$14,000$

Sole$-$proprietorship business loss $$35,000$

Allowable business investment loss $($ABIL$)$ $$12,000$

Unrestricted farming loss $$11,000$

Limited partnership loss $$7,500$

She donated $$1,500$ in $2023.$

Aside from her employment income, she runs a business. Following is revenue and expenses data for

$2023$ as per the accounting records.

Revenue and expenses information

For the fiscal period ending December $31,2023$

Total revenue $$224,000$

Total expenses:

Building operating expenses $18,600$

Insurance $2,000$

Payment to assistants $31,200$

Supplies $750$

Bank service charges $120$

Office expenses $9,400$

Meals $10,500$

Depreciation $2,100$

Beginning UCC of Computer $($used in business$)$: $$1,500$

Furniture purchased during the year $($used in business$)$: $$2,000$

Automobile operating expenses:

Fuel and oil $$750$

Insurance $3,600$

Maintenance and repairs $1,200$

Interest expense $800$

Total km driven $30,000$

Business km driven $25,000$

Sophie has some investments in some Canadian and international companies. In $2023,$ following are her

income from the investments.

$1$ Received cash dividend from Rimmell Inc., a Canadian owned public company. $$13,500$

$2$ Received cash dividend from $24567831$ Ontario Inc., a CCPC$.$ $$50,000$

$3$ Received stock dividend from Sumer Inc., Canadian owned public company. Initially

Sophie owned $30,000$ shares before the stock dividend declaration. Sumer Inc. declared a

$25\%$ stock dividend. The fair market value of the stock is $$9\mathrm{.}75.$

$4$ Received cash dividend from Blackcherry Inc., a US company. The company deducted

$$500$ as foreign tax.

$$5,000$

$5$ Received cash interest from interest from GIC investment RBC Bank. $$1,200$

$6$ Received interest from interest from GIC investment in TD Bank. The interest amount

has been reinvested by the bank.

$$1,500$

Following are the gross up and dividend tax credit rates.

Gross up $-$ Eligible dividend $38\%$

Gross up $-$ Non$-$eligible dividend $15\%$

Dividend tax credits $($Eligible$)$

Federal $6/11$

Provincial $5/11$

Dividend tax credits $($Non$-$eligible$)$

Federal $9/13$

Provincial $4/13$

On March $1,2022,$ Sophie purchased a residential duplex for $$725,000.$ Of this total, it is estimated that

the land has a value of $$150,000$ at the time of purchase and the building value was $$575,000.$ The two

duplex units are identical in size and, for purposes of allocation to a CCA class, the property is considered

to be a single property.

Before the end of March $2022,$ both duplex units were rented. The tenants occupying one of the units

asked that, in return for an additional amount of rent, Sophie furnish the unit. Furniture an appliances for

the unit were purchased by Sophie on April $1,2022,$ at a cost of $$18,500.$

During the $2022$ taxation year, rents on the two units totalled $$48,500$ and expenses $($other than CCA$)$ of

$$28,000.$

Late in $2023,$ the tenants in the furnished unit moved out. As Sophie did not wish to continue renting the

unit on a furnished basis, she sold the furniture and appliances to the departing tenants for $$14,000.$

In $2023,$ the two duplex units generated total rents of $$65,000$ and expenses $($other than CCA$)$ of $$32,000.$

Sophie claimed maximum CCA for both years.

Required:

Prepare a tax return for Sophie Brown for $2023.$ Make sure, in your tax return, you cover all the

issues including the following. You may use T$1$ General form to prepare the tax return.

$($a$)$ Calculate net income.

$($b$)$ Show the breakdown of Division C deductions.

$($c$)$ Calculate taxable income.

$($d$)$ Show the carry forward balance at the end of $2023.$

$($e$)$ Tax payable.