Lenny disposed of some shares of Underground Airways Limited, a QSBC, in January 2016 and realized a taxable capital gain of $305,000. In addition, he received $13,750 in interest and incurred a net rental loss of $2,500.

Also in 2016, Lenny realized a business investment loss (before any adjustment) of $50,000.

Prior to 2016, Lenny received cumulative interest income of $6,875 and grossed-up taxable dividends of $1,563. He also incurred a cumulative net rental loss of $12,500 and carrying charges of $12,188. In 1999, Lenny realized taxable capital gains of $25,000 on QSBCS which he fully offset with the capital gains deduction. Lenny had no previous capital transactions.

REQUIRED

Compute Lenny’s capital gains deduction for 2016 supported by all the necessary calculations.