Jim and Stan formed a tax consulting partnership on February 1, 2018. Each partner contributed $50,000 in return for an equal share of the profits from the partnership. On January 1, 2022, Stan sold his interest to Julie for $150,000.

The following is the income statement of the partnership:

Jim and Stan

Income Statement

For the year ended December 31, 2021

Gross revenue $424,400

Expenses:

Office expenses $69,000

Rent 58,300

Office salaries 74,300

Charitable donations 10,600

Amortization (Note 1) 23,300

Meals and entertainment 15,000 250,500

173,900

Other income:

Gain on sale of shares (Note 2) $84,800

Dividends from Canadian-resident public corporations 40,000

Capital dividends 17,000 141,800

Net income $315,700

Notes:

1. Capital cost allowance (CCA) for 2021 was $40,300.
2. The capital gain for tax purposes is the same as the financial accounting gain.

In 2021, each partner drew $132,000.

Prior year financial statements of the partnership provided the following information for the following years ended December 31:

2018 2019 2020

Business income (loss) $(70,000) $127,300 $159,100

Taxable capital gains - 12,800 -

Charitable donations - 4,200 8,400

Drawings Jim 24,000 48,000 60,000

Drawings Stan 24,000 48,000 72,000

1. What is the partnership income for the year for tax purposes?

2. What is Stan's share of the partnership income from the year?

3. What is Stan's adjusted cost base (ACB) of the partnership interest immediately before the sale? (assume his share of the partnership income is $128,700)

4. What is Stan's taxable capital gain on the disposition of the partnership interest? (assume that his share of the partnership income $128,700)