Mrs. Jane Brown is widowed. She is 57 years old Her husband passed away in 2019. Since that time you have been assisting her in the preparation of her tax returns. It is now 2021 and she has approached you for assistance in the preparation of her 2021 tax return.

Mrs. Browns only source of income is from her investments which she manages herself.

Details relating to her investments are as follows:-

i. She owns 2 rental properties .

Details relating to the rentals are as follows:-

Property #1..Property #2

Gross Rental Income.$30,000$46,000

EXPENSES:-

Utilities...........$8,000.$9,000

Property taxes. 5,000. 6,000

Repairs.8,000 3,000

Mortgage interest10,00016,000

Opening U.C.C.Class #1$248,675..$292,458

ii. Interest income from Guaranteed Investment Certificates.$15,000

Dividends from share investments:-

Dividends from CCPCs$20,000

U.S. dividends (net of 15% withholding tax) 17,000

Dividends from public corporations...20,000

She had borrowed $40,000 from the Bank of Montreal to purchase the shares. The rate of interest paid on the borrowed funds was 3%.

Additional Information relating to the 2021 tax year:-

i. Mrs. Brown has a 20 year old daughter, Melissa, who attends the University of Waterloo. Mrs. Brown paid Melissas tuition fees for 12 months of $12,000. She also has an adopted seven year old daughter(Anne) who has been certified as mentally incapacitated by a medical doctor.

ii. Mrs. Browns mother(Jan) who is 82 years old and disabled. She receives $9,000 from Canada Pension Plan and $6,000 from Old Age Security. Mrs. Browns mother has no other source of income.

iii. Mrs. Brown paid the following additional disbursement during the year:-

Donations to the Mount Sinai Hospital$7,000

Donations to her church$5,000

Purchase of Princess Margaret hospital lottery tickets$2,500

Political contributions to the Liberal Party of Canada$2,000

Medical expenses.$15,000