Ken Potman is the sole shareholder in Brickbase Enterprises Ltd$.,$ a Regina$-$based construction company. He is also a $35\%$ partner in a

retail kitchenware store, although he does not actively participate in its management. The following information relates to Ken's

financial affairs for the year $2023.$

Brickbase was organized three years ago. For its year ending May $31,2023,$ the company earned a profit of $$88,000.$ Ken originally

contributed $$200,000$ to the corporation, using $$50,000$ of his own savings and funding the balance with a bank loan. In return, the

corporation issued Ken $$1,000$ worth of common shares and $$199,000$ of preferred shares. In $2023,$ the company paid a dividend of

$$16,000$ on the preferred shares. All of Brickbase's income is subject to the small business deduction.

During the year, Ken sold a warehouse property for $$180,000($land $-$ $$15,000,$ building $-$ $$165,000).$ Brickbase used the building to

store construction equipment and the company paid Ken a fair rental for use of the property. The property was originally purchased

at a cost of $$140,000($land $-$ $$10,000,$ building $-$ $$130,000).$ At the end of $2022$ the building had an undepreciated capital cost of

$$110,000.$

At the same time as the sale, Ken purchased a larger warehouse property $($constructed after March $18,2007),$ which was also rented to

Brickbase. The new property cost $$400,000($land $-$ $$50,000,$ building $-$ $$350,000).$ During the year, the company paid Ken net rents of

$$39,900$ for both properties. The new property was financed with the proceeds from the sale of the old building as well as mortgage

financing.

The retail store partnership earned $$40,000$ for its year ending December $31,2023.$ The profit consisted of a $$32,000$ profit from

operations and $$8,000$ of interest income earned on excess undistributed cash deposits.

Ken's other cash receipts and disbursements for $2023$ are shown in the following chart.

Receipts:

Salary from Brickbase

Dividends from Canadian public corporations

Dividends from foreign public corporations $($net of $10\%$ foreign withholding tax$)$

Winnings from provincial lottery

Interest on a loan to his daughter

Disbursements:

Contribution to Brickbase employee pension plan

Investment counsel fees

Legal fees for registering mortgage on new warehouse

Life insurance premium on policy required as collateral for the bank loan used to purchase Brickbase shares

Interest on warehouse building mortgage

Interest paid on house mortgage $($The house mortgage is $$100,000,$

of which $$70,000$ was used to acquire the house. The balance was used to purchase public corporation shares.$)$

Interest on bank loan $($re: Brickbase shares$)$

Donations to local charity

Safety deposit box fees

On July $12022$ Ken purchased a four$-$year guaranteed investment certificate for $$30,000$ that bears interest at $8\%.$ The interest

compounds annually but is not payable until the end of the four$-$year term. Ken did not include any amount of interest in his $2022$

income.

During the year, one of the Canadian public corporations of which Ken is a shareholder issued him $100$ additional shares as a stock

dividend. The shares had a stated value of $$44$ per share. Ken placed the shares in his safety deposit box along with his other

securities$.$