Mark and Matt Doan are brothers and professional engineers. In early 2018 they formed a partnership in order to provide professional engineering services. When the partnership was formed each of the brothers made a capital contribution of $280,000 in cash. They have agreed to share all profits and losses equally. During the partnership taxation year ending December 31, 2018, the partnership had Net Income For Tax Purposes of $180,000, all of which was business income. The partnership made no charitable donations in 2018. During 2018, Mark withdrew $75,000 in partnership funds, while Matt's drawings were only $23,000.

Income Statement

Mark And Matt Doan Partnership Year Ending December 31, 2019 (partial)

Revenues $708,000

Operating Expenses:

Rent ($48,000)

Amortization Expense (Note 1) ( 12,000)

Office Salaries ( 41,000)

General Office Costs ( 18,000)

Meals And Entertainment ( 23,000)

Charitable Donations ( 17,000) (159,000)

Operating Income $549,000

Other Income:

Gain On Sale Of Investments (Note 2) $14,000

Eligible Dividends Received From Canadian Corporations $8,000 $22,000

Net Income $ 571,000

Note 1 Maximum 2019 CCA, which the partners intend to deduct, is $19,000.

Note 2 The gain resulted from the sale of temporary investments. The investments had an adjusted cost base of$60,000 and were sold for $74,000.

Other Information

1. During 2019, Mark had drawings of $190,000 while Matt had drawings of $290,XXX.

2. During 2019 Matt's only income other than amounts related to owning the partnership, was eligible dividends received from Canadian companies of $34,000. Assume that other than credits related to partnership allocations and the eligible dividends he received personally, Matt's only tax credit was his basic personal credit.

3. On January 1, 2020, Matt sells his interest in the partnership to an arm's length individual for $535,000. Required: Calculate Matt's federal Tax Payable for the year ending December 31, 2019. In addition, determine the taxable capital gain or allowable capital loss that would result from Matt's sale of his partnership interest. Ignoreany CPP implications with respect to self-employment income.