Problem 4 About five years ago, Isabelle, Eden, Samara, and Joy formed a partnership to carry a snow removal and landscape business. All partners, except Isabelle, made an initial contribution of $50,000. Isabelle made an initial contribution of $90,000. Each agreed to share in the profits and losses of the business as follows: 20% to each Samara, Joy & Eden and 40% to Isabelle based on contributions of capital and labour to the partnership. At the end of the 2023 fiscal year of the partnership, Isabelle and Samara decided to go their separate ways. On January 1, 2024, Samara received $125,000 for her partnership interest, while Isabelle received $250,000. The tax records for the five years ended December 31, 2022 reflected the following cumulative amounts: Income (before capital gains) from operations for tax purposes losses $750,000 80,000 Capital Gains (to 2022) 10,000 Drawings by the partners 730,000* Charitable Donations (added back to Division B income for tax purposes) 15,000 *Isabelle, $170,000; Eden, $150,000; Samara, $250,000; and Joy, $160,000. Financial results for the year ended December 31, 2023, are as follows Net Income per financial statements Charitable Donations (deducted from accounting income) Drawings: Isabelle Samara Eden Joy $65,000 2,000 10,000 5,000 5,000 4,000 Other Information 1. Isabelle is single, and has interest income of $2,500 for the year 2023 2. Samara has interest income of $6,600, and has made an RRSP contribution in 2023 of $2,700 (Her earned 2022 income was $15,000) You have agreed to do the following 1. Compute the partnership income for the year ended December 31, 2023, and the income to be allocated to the partners. 2. Advise on the tax consequences to Samara and Isabelle as a result of the disposition of their partnership interests in 2024. Compute Samara's and Isabelle's capital gain on the disposition of their partnership interests on January 1, 2024. 3. Compute Samara's and Isabelle's taxable income and tax payable for 2023 using the hypothetical provincial tax rate table presented in chapter 10.