Joe has asked you to calculate the taxable capital gain or allowable capital loss, if any, arising on the above transactions. CIOS Problem 4 Schillaci u Jean-Luc, the taxpayer in this case, was experienced in retail real estate, having originally been bilderon 000,00 potesto Mob DTC 1848 employed by a fast-food chain of restaurants. His duties were to locate, acquire and open restaurants on behalf of his employer. He acquired extensive knowledge in packaging sites for retail operations. Two years ago, Jean-Luc began to work as an employee for Jorge, a successful builder of homes and condominiums, real estate developer for investment of rental apartments and retail plazas, and trust company owner. Jean-Luc was employed on a salary and bonus basis. At the time, Jean-Luc was also as to licensed real estate broker and owned a brokerage firmon on toimus 0304 sonun Jean-Luc's first project for Jorge involved developing a retail complex in Toronto. He was instru- mental in obtaining two anchor tenants as well as two others. This was a successful venture. His second venture involved a strip plaza in London, Ontario. By the time Jean-Luc and Jorge were prepared to purchase the property, most of the pre-development work had been completed and two nationally recognized restaurant chains had signed letters of intent and/or offers to lease. These two tenants represented 60% of the rentable area of the plaza. With those tenants in place, other tenants were prepared to rent because of the traffic which would be generated by the presence of the two popular fast-food restaurants. As a result, financing the project would not be a problem. All of the leases which were negotiated were of the "net-net" type -- the landlord being responsible only for its financing costs. The tenants were responsible for all other costs and expenses involved with the plaza, in addition to their own businesses. Introduction to Federal Income Taxation in the tenants took possession. Shortly thereafter, the tenants completed their respective areas and were Jorge, was established to own the plaza. Neither Jean-Luc nor Shloimie paid for his respective interest in A partnership of Jorge (74%), Jean-Luc (24%), and Shloimie (296), the long-time accountant for children's future. Jorge and Shloimie regarded the project as an opportunity to acquire and own an the partnership. Jean-Luc considered this to be a long-term project that would provide income for his income-producing property with very little investment, since most of the funds were provided by debt year, about a year after the purchase by the partnership, the building was completed to the point where City planning and zoning for the plaza was approved and most of the financing was in place. Last 240 financing DO 10 negotiated pending a drop in interest ratesinensie einwas in place and permanente com os ani o deluje compenda za oso on. Yol This year, Jorge began to have financial difficulties and his assets were liquidated by his creditors. Since his creditors did not have security on the plaza project, Jorge was in a position to sell that asset in an orderly manner. Although Jorge controlled the partnership, he received Jean-Luc's consent to sell the property. Jean-Luc's share of the gain on the sale was about $157,000.00 1903 000,000 Jean-Luc filed his tax return for this year showing the gain as a capital gain. 000,0012 000.009 000009 ,000.0 A CRA assessor has called to indicate that she is considering a reassessment of the income in question as income from a business, an adventure in the nature of trade, or from a profit-making undertaking or concern. As Jean-Luc's tax adviser, evaluate the fact situation and recommend a course of action. Drablar 5