Lia Wright is the sole shareholder of Newgardens Ltd. (NGL), a Canadian-controlled private corporation. The corporation holds investments in shares, bonds, and real estate. You have been retained to complete NGLs tax return for the year ended December 31, 2021, and to provide certain other tax advice.

It is now February 15, 2022, and you have gathered the information outlined below.

The draft income statement for the year ended December 31, 2021, is as follows:

Income
Interest on bonds and certificates	$	78,000
Dividend income		32,000
Net loss from real estate rentals		(19,000	)
Gain on sale of land (Stoney Lake)		170,000
Share of profits of Rare Products Ltd.		120,000
Less Expenses
Legal fees for general corporate affairs		(1,000	)
Directors fees		(21,000	)
Donationscharitable		(8,000	)
Income before income tax	$	$351,000

NGL owns a 40% interest in Sharlet (a partnership), which has a June 30, 2021, year end. The partnerships profit for the year was $200,000, which consisted of dividends from taxable Canadian corporations of $80,000 and royalties from mineral rights of $120,000. On December 31, 2021, NGL received $100,000 as its share of a partnership cash distribution. The partnerships results are not reflected in the above income statement.

On September 30, 2021, NGL purchased a $100,000 guaranteed investment certificate bearing 9% interest. The company intends to record the interest of $9,000 on September 30, 2022, its one-year anniversary date.

The dividend income of $32,000 consists of the following:

Canadian Public corporations	$	14,000
Turner Inc.an American corporationnet of a 10% U.S. withholding tax		18,000

Not included in the above is a dividend received from Rare Products Ltd. of $25,000. NGL owns 50% of its voting shares and records the investment using the equity method of accounting. Rare earned business income of $240,000 in the current year.

During the year, NGL received 100 shares of Herford Ltd. (a public corporation) as a stock dividend. Herford increased its paid-up capital by $30 for each stock dividend share issued. NGL did not record the receipt of the stock dividend.

In January 2021, NGL purchased three hectares of land on Stoney Lake for $130,000. The land was then rezoned and subdivided into six building lots. The entire subdivision was immediately sold to a building contractor for $300,000. The payment terms called for no cash down, but payments of $50,000 are required as the contractor completes construction on each lot. By December 31, 2021, one payment of $50,000 had been received.

In 2020, NGL had purchased two rental properties as follows:

	Land			Building			Total
Fourplex	$	50,000		$	150,000		$	200,000
Townhouse #1		20,000			40,000			60,000
	$	70,000		$	190,000		$	260,000

Maximum capital cost allowance was claimed in 2020.

In 2021, townhouse 1 was sold for $75,000 (land $25,000, building $50,000).

On December 1, 2021, NGL purchased townhouse #2 for $50,000 (land $11,000, building $39,000). Also, in 2021, NGL constructed a sixplex rental unit for $437,000, as follows:

Land	$	80,000
Permanent landscaping		8,000
Labour and materials		300,000
Air-conditioning and heating equipment		49,000
	$	437,000

All of the properties resulted in a net rental loss of $19,000 (as shown on the financial statement). The following items are included in the net loss calculation:

Cost of surveying land (new sixplex)	$	2,400
Amortization/depreciation		28,000
Legal fees for mortgage (new sixplex)		2,000
Advertising for new tenants		4,000

Required: Determine NGLs net income for tax purposes for 2021. Also, prepare a breakdown of the net income for tax purposes showing the net income from property and any other sources of income. Assume all rental properties are residential properties.

Net income for tax purposes 2021 for Newgardens Ltd.: Net income per financial statements \begin{tabular}{l} Net Property income \\ \hline \end{tabular} Net income for tax purposes 2021 for Newgardens Ltd.: Net income per financial statements \begin{tabular}{l} Net Property income \\ \hline \end{tabular}