Owen Winehouse Case

Owen Winehouse is 51 years old and has been married to Arlene Winehouse for over 25 years. Having

made his fortune through a widely

successful initial public offering, he devotes most of his time to

mentoring young entrepreneurs and participating in volunteer activities.

Information relevant to Owen's

2016

tax return follows.

1.

During

2016

, Owen received eligible dividends from Canadian

public companies in the amount of

$32,400.

2.

For several years, Owen

has owned 100 percent of the shares of an eligible small business

corporation. The adjusted cost base of these shares is $520,000. On

July

1,

2016

, these shares are

sold for $600,000. As

sume none of the gain is eligible for the lifetime capital gains deduction.

During

2016

, the new small business corporation paid non

-

eligible dividends of $22,000.

3.

The residence occupied by Owen and Arlene was purchased in 200

2

for $320,000. As their spa

ce

needs have grown considerably, they have decided to replace this property. It is sold during

February, 201

6

for $375,000. Selling costs, including commissions, total $20,000. Their new

residence, purchased at the beginning of 201

6

, cost $458,000.

4.

In

January of this year,

Owen

purchased

a

cottage to

operate as

a rental property.

The purchase

price was

$235,000, of which $75,000 can be allocated to the land. Owen plan

s to

never claim this

property as a principal residence and will

take CCA on

it inste

ad

.

In addition, Owen spent

$42,000 furnishing the cottage. All of the furnishings are Class 8 assets.

On March 1, 201

6

, it is rented for $3,000 per month for the remainder of the year. Expenses, other

than CCA, total

$22,000 for March 1 to December 31,

201

6

.

5.

For several years, Owen has been interested in French common stock Debit Agricole (DA). The stock

trades in Euros (

) and Owen's first purchase of 1,000 shares was made on October 1, 201

3

for

14.00 per share. He acquired the Euros at a rate of 1

.00 = $1.

57

. Subsequent transactions were

as follows:

Date

Qty Purchased

(Sold)

Price per

Share

Exchange

Rate (Cdn$)

November 4, 201

4

300

14.50

$1.

55

January 6, 201

5

(400)

15.00

1.

54

June 24, 201

6

600

15.50

1.

51

On December 2, 201

6

, he sells all of

his shares for 13.00 per share. At this time, = 1.35. The

Euros are immediately converted into Canadian Dollars.

6.

Owen

sell

s

his vintage power boat. He had purchased this boat several years ago in damaged

condition for $10,000. He subsequently spent

$

24,627

restoring it to mint condition. As a result, he

was able to sell it for $50,000 during

2016

.

7.

During

2016

he sold his st

amp collection for $12,000. Th

e total cost of the colle

ct

ed stamps was

$8,000

. He also sold an oil painting for $700. This

paining, which he had always hated, had been a

gift from Arlene's mother. At the time of the gift, the painting had a fair market value of $4,000.

Required:

Using the formatted Excel spreadsheet provided, determine Owen's minimum Net Income for

Tax Purpo

ses for

2016

.