In 20X0, Kiranjit Dhillon acquired 1,000 shares of Pluton Ltd. (a Canadian public corporation) at a cost of $21,000 plus a brokerage commission of $600. During 20X0, she received cash dividends of $1,200. In 20X1, Pluton failed to pay the cash dividend owing to a cashflow shortage; instead, it issued a stock dividend, whereby Dhillon received an additional 100 shares. At the time of the stock dividend, the share value was $18 per share.
On December 15, 20X1, with the company’s financial position continuing to decline, Dhillon sold all of her shares of Pluton for $15,000. She felt relieved when the share values declined further over the next two weeks. She incurred brokerage fees of $300 on the sale.
Early in the new year, Pluton apparently solved its financial crisis by selling an unprofitable subsidiary. Dhillon’s broker recommended that she again invest in Pluton’s shares. On January 11, 20X2, she purchased 1,000 shares at a cost of $12,000 plus brokerage fees of $200.
In June 20X2, she gifted all of her shares in Pluton to her son, who was about to attend university. At that time, the shares were valued at $20,000.
Required:
Calculate the amount by which Dhillon’s net income for tax purposes will be affected by the above transactions for the years 20X1 and 20X2.