Mr. Barney Rubble has recently received a sum of $150,000. He is considering a few different investments. He has come to you because he has very limited knowledge of the different types of investments or their tax consequences and he wants to be informed fully before making his decision. Here are the alternatives that Mr. Rubble is considering:

Investment of the full $150,000 in a 5 year guaranteed investment certificate that pays annual interest of 1.45 percent.

Investment of the full $150,000 in the shares of Bedrock Inc., a small Canadian Controlled Private Corporation. Mr. Rubble expects that the company will pay non-eligible dividends on these shares in the amount of $2,000 per year.

Investment of the full $150,000 into a condo as a rental property. Mr. Rubble would go in with a couple of his good friends to purchase the condo and then rent it out to a tenant. Mr. Rubble's portion of the rent would be approximately $5,000 per year and his share of the expenses would be around $3,000 for condo fees, property taxes, etc.

Mr. Rubble will earn employment income of $100,000 during 2020. Assume his provincial tax rate on any additional income will be 12 percent, while the provincial dividend tax credit on non-eligible dividends is equal to 20 percent of the gross up.

Required:

Write a short (one page) memo providing advice on Mr. Rubble's investment options with a focus on the tax implications. Be sure to consider the following:

You can make a recommendation to your client since they have yet to take any action.

Your client will have limited understanding of income taxation, so you need to analyze the issue at a high level and then clearly describe any relevant tax implications of their actions in language that is appropriate to their level of understanding.