Required: (represents 10% of your final grade)

For the tax scenario that you are assigned, write short memo explaining the tax policy to a client. Keep in mind that the client will have limited understanding of income taxation, so you need to analyze the issue at a high level and then draw a conclusion. Explain the impact that your conclusion will have on the tax position or taxes payable (now or in the future).

The grade of this assignment will be allotted as follows:

50% of the marks- analysis of tax issue (using facts from the case)

50% of the marks - professional communication at the level of the client (grammar is accurate and complete)

1) Scenario #1 Laurie, a clerk who works in the City of Orillia Municipal office, purchased a waterfront property on Lake Couchiching in January 2018 for $300,000. The property consisted of an old cottage which had not been maintained or inhabited for years. The waterfront property was 100 ft wide and relied upon the lake for water supply. This limited the amount of time that the property could be used because water supply ceased in the winter months. The property was on a rural road just outside of town. IN the time that she has owned this property, Laurie has not stayed at the property nor has she made any effort to improve the cottage or maintain it. In September 2019, the city of Orillia announced that they are expanding the city water supply outside the city limits. This expansion means that the city will provide their water supply to these neighbourhoods since they are growing. This will mean that Laurie's property will be accessible all year round and will increase in value. It is now November 2019 and Laurie has just accepted the offer to sell her property for $650,000. Laurie asks you to advise her on the tax treatment for this transaction