Problem 1: Division B Income (Total Points Available: 28) Required: Mr. Armstrong has provided you with the below informaiton. Please determine Mr. Armstrong's net income for tax purposes (Division B income) in 2021 as a result of the information. Show all of your calculations and necessary explanations. 1. He sold 500 shares of his employer (a public corporaation) on December 15th, 2021, for $25 per share. The shares were obtained through stock options for $10 per share in 2018. The fair market value of each share on the exercise date was $15. 2. He sold his three existing residences: Toronto home, his apartment in Niagara Falls, and his cottage during the year and moved into a condominium. He has ordinarily inhabited all of the three residences. His Toronto home was purchased in 2012 at a cost of $125,000. He sold it in September 2021 for proceeds of $400,000. He paid real estate commission of $10,000 on this sale. His apartment in Niagara Falls was purchased in 2017 at a cost of $250,000. He sold it in October 2021 for proceeds of $370,000. He paid real estate commission of $8,000 on this sale. His cottage was purchased in 2019 at a cost of $120,000. He sold it in November 2021 for proceeds of $213,000. He paid real estate commission of $9,000 on this sale. He did not own any other residences during the relevant years and, thus, has not previously designated any of the relevant years for purposes of the principal residence exemption. 3. He received dividends from three corporations ($ 200 from the shares of his employer, $300 from shares of a CCPC, and $1,000 from a United States corporation ($100 has been withhead by IRS as foreign tax)). 4. On December 5th, 2021, he sold 100 shares of the CCPC, for $30 per share. The trading history of the CCPC's shares are listed below (round the stock price per share to the nearest integer in the calculation): May 24, 2015 purchased 300 shares @ $26 per share June 20, 2016 purchased 150 shares @ $29 per share June 9, 2017 sold 200 shares @ $15 per share July 5, 2017 purchased 150 shares @ $12 per share June 3, 2019 purchased 100 shares @ $18 per share Apr. 19, 2020 received a 5% stock dividend with each share received having a paid-up capital value of $20 5. He sold the following personal items during 2021: Proceeds Cost Antique table....................................................................... $ 200 $ 1,500 Coin collection ............................................................................................ 900 450 2 Paintings ............................................................................................ 8,500 7,000 He has a listed personal property loss, carried forward from 2017, of $2,000. 6. He owns two other rental properties. Rental #1 is a Class 1 building, which is rented to be used as a supermarket. Rental #2 is a vacant land, which is rented to be used as a parking lot. Rental revenue and allowable expenses (excluding capital cost allowance) from the two properties are as follows: Rental #1 Rental #2 Gross rental revenue ............................................................................................... ............................................................................................... $30,000 $ 15,000 Expenses: Mortgage interest ....................................................................................... (25,000) Property taxes ....................................................................................... (3,000) (3,500) Insurance ....................................................................................... (2,000) (2,400) Maintenance ....................................................................................... (8,000) (1,500) Rental #1 building has a capital cost of $400,000 and UCC on Jan 1st 2021 of $300,000. Rental #2 land had an adjusted cost base of 500,000 on Jan 1 st 2021 and the land was sold in the end of December 2021 to the current tenant directly for a proceeds of $650,000 with no commission fees. 7. On October 1 st, 2020, He purchased a $ 50,000 GIC three-year GIC that pays 4% interest compounded yearly. No interest will be received until the maturity date of the GIC on September 30th, 2023.