Question 1 (24 marks The following information relates to the investment income earned by Ms. Myrtle Beech for 2021: 1) Eligible dividends received from taxable Canadian corporations: Canadian Tire Limited Pfizer Inc. Royal Bank of Canada $ 650 (actual amount received) $ 1,725 (actual amount received) $ 1,850 (actual amount received) 2) Myrtle owns shares in Good Investments Limited, a Canadian-controlled private corporation. During 2021, the company paid dividends out of its capital dividend account. Myrtle received $ 1,300 of these dividends. 3) On January 2, 2021, Myrtle transferred his ownership of 750 shares of Whiteclaw Inc., a taxable Canadian corporation, to her daughter Crystal, as birthday present for her sixteenth birthday. The adjusted cost base of the shares was $4,500. The Fair Market Value of these shares was $5,500 at the date of transfer to her daughter. Crystal received $600 (actual amount) in eligible dividends from these shares during 2021. 4) During 2020, Myrtle transferred a Hydro One bond to her husband, Sandy. Sandy received interest on this bond in the amount of $1,825 during 2021 (as reported on his T5). 5) On June 1, 2020, Myrtle purchased a five-year Guaranteed Investment Certificate in the amount of $ 7,500 at an interest rate of 5.0%. Interest will be paid on each anniversary date of the GIC. 6) On September 1, 2021, Myrtle purchased a 90-day, $15,000 Treasury Bill at a cost of $14,352 7) During 2021, Myrtle received dividends from IBM Corporation, a U.S. company. The actual amount of dividends received in 2021, net of withholding taxes of 15%, was $1,275. Assume that the average exchange rate for 2021 was $1.00 U.S. = $1.3240 Canadian. 8) Myrtle paid the following amounts in 2021: Accounting fees (not for preparation of her tax return) $ 300 Interest on funds borrowed to purchase investments 1,600 Interest on house mortgage 2,575 (continued next page) 2 Required: a) Calculate Myrtle's NET INVESTMENT INCOME for 2021. Don't forget income attribution rules! b) Calculate the federal dividend tax credit, which Myrle will be able to claim on her 2021 personal income tax return. Question 1 (24 marks The following information relates to the investment income earned by Ms. Myrtle Beech for 2021: 1) Eligible dividends received from taxable Canadian corporations: Canadian Tire Limited Pfizer Inc. Royal Bank of Canada $ 650 (actual amount received) $ 1,725 (actual amount received) $ 1,850 (actual amount received) 2) Myrtle owns shares in Good Investments Limited, a Canadian-controlled private corporation. During 2021, the company paid dividends out of its capital dividend account. Myrtle received $ 1,300 of these dividends. 3) On January 2, 2021, Myrtle transferred his ownership of 750 shares of Whiteclaw Inc., a taxable Canadian corporation, to her daughter Crystal, as birthday present for her sixteenth birthday. The adjusted cost base of the shares was $4,500. The Fair Market Value of these shares was $5,500 at the date of transfer to her daughter. Crystal received $600 (actual amount) in eligible dividends from these shares during 2021. 4) During 2020, Myrtle transferred a Hydro One bond to her husband, Sandy. Sandy received interest on this bond in the amount of $1,825 during 2021 (as reported on his T5). 5) On June 1, 2020, Myrtle purchased a five-year Guaranteed Investment Certificate in the amount of $ 7,500 at an interest rate of 5.0%. Interest will be paid on each anniversary date of the GIC. 6) On September 1, 2021, Myrtle purchased a 90-day, $15,000 Treasury Bill at a cost of $14,352 7) During 2021, Myrtle received dividends from IBM Corporation, a U.S. company. The actual amount of dividends received in 2021, net of withholding taxes of 15%, was $1,275. Assume that the average exchange rate for 2021 was $1.00 U.S. = $1.3240 Canadian. 8) Myrtle paid the following amounts in 2021: Accounting fees (not for preparation of her tax return) $ 300 Interest on funds borrowed to purchase investments 1,600 Interest on house mortgage 2,575 (continued next page) 2 Required: a) Calculate Myrtle's NET INVESTMENT INCOME for 2021. Don't forget income attribution rules! b) Calculate the federal dividend tax credit, which Myrle will be able to claim on her 2021 personal income tax return