Two months after she retired, Rose Robertson received a retiring allowance for her long service to the employer in the amount of $45,000. The employer had initially offered her a retiring allowance of $25,000, but Rose thought the amount was unreasonable based on her long years of hard work. She hired a lawyer, who was able to get the employer to increase the retiring allowance. Rose was very happy to settle for the $45,000 retirement allowance. Rose incurred legal fees of $2,500, which are eligible for the deduction pursuant to ITA 60(o.1). Further, based on Rose's years of service prior to 1996, as per ITA 60(j.1), Rose is eligible to transfer a maximum of $52,000 to her RRSP. Based on the tax planning opportunities related to retiring allowances, how much of the retiring allowance should Rose transfer to her RRSP? 

$42,500

$52,000 

$45,000 

$49,500