The following tax information is extracted from Mrs. Hawkins' books and records: Employment income = $72,000

Interest Income = $5,00

Capital gain (on securities) = $9,900

Deductible carrying charges =$1,000

The following balances are losses carried forward from December 31, 20014:

Non-capital loss arising      -2009   $24,000
                                          - 2010     26,000
                                          - 2013     28,000
   Total non-capital losses              $78,000
Net capital loss arising in 2014     $12,000

During the latter part of 2015, Mrs. Hawkins moved from Montreal to Toronto to commence working for Leaves Co. Ltd. She received a $100,000 housing loan from Leaves Co. Ltd., which she used to help purchase a house in Toronto. Mrs. Hawkins received the interest-free loan on October 1, 2015.

Mrs. Hawkins previously worked for Les Habitants Co. Ltée (a public company). Prior to leaving Les Habitants Co. Ltée, Mrs. Hawkins exercised the stock option that she held in Les Habitants Co. Ltée. Mrs. Hawkins was able to purchase 2,000 listed common shares of Les Habitants Co. Ltée for $4 per share (the fair market value of the shares at the time the option was granted). The shares were trading at $10 per share at the time she exercised her option to purchase the shares.

Assume that the prescribed interest rate for the last quarter of 2015 is 1%.

—REQUIRED
Calculate Mrs. Hawkins' income and taxable income in 2015, in accordance with the ordering rules of Divisions B and C. Ignore the leap-year effects.

Answer rating: 100% (QA)

Employment Income 72000 Int benefit on loan 10000092 days365 1 252 Property Income pr... View the full answer