Question 93 (26 minutes) [Chapter 18] Matt, Marcus, Lucas, and Jonathon are partners in a publishing venture, MMLJ Publishing. They each contributed $10,000 to start the venture in October 2002, and thus share equally in the annual income. The following income statement was prepared for MMLJ Publishing for its year ended December 31, 2011. Gross revenues $200,000 Expenses: Amortization of fixed assets $3,750 Donations to registered charities 5,500 Employee salaries and benefits 39,360 Membership in fitness club for partners 2,500 Office rent 4,500 Office supplies 1,125 56,735 $143,265 Dividends from private taxable Canadian corporations 12,000 Capital gain on sale of investments 16,000 Net income $171,265 Additional information: (1) Capital cost allowance on fixed assets for the year is $3,300. (2) The partners each took drawings of $27,000 during 2011. (3) Matt's adjusted cost base of his partnership interest was $230,000 as of January 1, 2011. Required: a) What is Matt's share of the income for tax purposes of the above partnership for 2011? (13 minutes) b) What is the nature of Matt's share of the income of the partnership for 2011? (L.e., what is/are the source(s) of income?) (5 minutes) c) What is the adjusted cost base of Matt's partnership interest as of January 1, 2012? (9 minutes)