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Problem 2: (40 /o) You were preparing your client list with mspect to the personal tax return preparation season in February. You were told by

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Problem 2: (40 \"/o) You were preparing your client list with mspect to the personal tax return preparation season in February. You were told by Mrs. I that her husband, Mr. J, had passed away May 30, 2020, at age 66. Mrs. J is the executr'rx and has no income. Mr. I owned and operated a Canadian-controlled private corporation, ABC Ltd. Mr. J's 500 shares had an adjusted cost base and paid-up capital of $68,000. The fair market value of the shares at the date of death was $195,000. These shares are qualifying small business corporation (QSBC) shares. Mr. I earned $9,000 per month in salary, which was paid by direct deposit on the last day of the month. A non-periodic bonus of $68,000 had been declared on May 1, 2020 but had not yet been paid at the time of his death. C?!) of $2,898 has been, or will be, withheld on this income. He is not eligible for El. In addition to his shares, Mr. J owned bonds with aecrued interest of $2,900 in 2020 to the date of his death. Further, Mr. J had owned two rental properties. Net rental income before capital cost allowance was $6,800 for each month from January to May 2020, received on the last day of the month. Other Infamatr'on _' f I) Mr. I had earned income in 2019 of $75,000. He contributed to his RRSP the maximum amount allowed as a deduction on March 1, 2020. His RRSP was worth $195,000 at the time of his death. Mrs. J is the designated beneciary of his RRSP. {2] His 2019 personal tax return was prepared but not filed at the time of his death. {3) Mr. J had not used any of his capital gains exemption. {4) All of Mr. J's assets have been left to his wife, except for the unit #1 rental property that is bequeathed to his 20-year-old daughter. {5) The rental properties had the following details: The rental properties had the following details: 4\" Unit #2 Land Building Land Building Fair market value $120,000 $95,000 $180,000 $80,000 Capital cost 30,000 "12,000 1 10,000 93,000 UCC 50,000 74,000 You are asked to use the above information to (1) identify the ling requirements for Mr. J (6%); (2) discuss the tax implications of deemed disposition of shares (4%); (3] explain the tax implications of deemed disposition of rental properties (4%); (4] prepare Mr. J 's final return and Rights and Things returns [including federal and provincial taxes). Show all calculations and explain any unused information in your calculation (26%)

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