Question 1 (24 marks)

You were prudent with your money starting early on in your career and you can now live on your property income. You have the following receipts this year:

1. You own two rental properties.

Revenue

Expenses

Property A

Cost$44,000 building

$50,000 land

UCC$35,000

$34,000

$22,000, including $6,000 to reshingle the asphalt shingle roof.

Property B

Cost$49,000 building

$42,000 land

UCC$35,000

Sold 2018

Building$50,000

Land$60,000

Commission & legal fees$3,000

$10,000

$27,000

1. You have various investments that generate interest income.

• Interest of $2,000 received each quarter on an investment in bonds. The 25-year bond matures in 20 years and the interest is received on February 1, May 1, August 1 and November 1.
• On May 1, 2018, you invested $55,000 in another GIC that will mature in three years. The GIC pays 5% interest compounded monthly.

1. You have invested in shares in order to receive dividend revenue, as well as capital gains. You have received the following dividends this year:

• $12,000 in dividends received from a CCPC that receives the small business deduction on all their income.
• $10,000 in eligible dividends received from a large public corporation.

1. You received $45,000 from the sale of shares on May 10, 2018. On January 1, 2018, you held 10,000 shares in this corporation. The shares had an average cost of $5.00 per share. On May 10, 2018, you sold 9,500 shares and paid a brokerage fee of $200.00.
2. In July, 2018 you sold a painting to your neighbor. The original cost was $10,000. You sold the painting for $14,000.

REQUIRED:

Part A: Calculate your net income (Division B income). (20 marks)