Mr. Richmond, a new client, has invested in rental properties, principal residences and other capital property with inheritance monies and other liquid cash. He provides you with the following information with respect to his 2012 taxation year.
Mr. Richmond is employed by Wealth Inc., a Canadian-controlled private corporation, and received the following income and benefits:
(1)

(2) Mr. Richmond paid professional fees of $500 to the Professional Engineers of Ontario.
(3) Mr. Richmond, who is engaged in negotiating contracts for his employer, received for the entire year a monthly allowance for travelling and car expenses of $550 and $650, respectively.
In September of 2012, Mr. Richmond sold his car for $12,500 and purchased a new car costing $35,000, including HST of 13%. Mr. Richmond purchased his previous car in January 2009 for $30,000 plus PST and GST. The UCC at January 1, 2012 was $10,000. CCA has been taken each year on a prorated basis to reflect the use for employment purposes. Mr. Richmond's kilometres for personal use were 6,250 out of a total kilometres of 25,000.
Mr. Richmond's employment contract requires him to use his own car and pay all of his expenses.
Travelling expenses:
Meals$ 3,500
Accommodation4,500
Gas and oil2,100
Insurance800
Maintenance500
Licence 130
$11,530
(4) Mr. Richmond sold two lots of his stock options. He provides you with the following:
1st lot - 450 shares sold on March 15, 2012, for $26.50 per share. These shares were pur-chased in February 2005 for $8 at which time the shares were valued at $10.50.
2nd lot - 600 shares sold on December 5, 2012, for $25 per share. These shares were pur-chased on April 12, 2012, for $15 at which time the shares were valued at $21. The fair market value at the date of grant was $17.
Mr. Richmond received an interest-free loan of $9,000 on March 12, 2012, to enable him to purchase shares of Wealth Inc. The loan was outstanding until the shares were sold on December 5, at which time the loan was repaid. Assume that the prescribed rate throughout the year was 7%.
In addition, during 2012, Mr. Richmond received the following income from various sources including certain capital dispositions.
(A) Mr. Richmond sold the following assets:

(B) During 2012, Mr. Richmond sold his two residences, in order to purchase a larger home in an expensive suburb. The following facts relate to these two residences:

(C) In addition to his residences, Mr. Richmond owns two rental properties. The following information pertains to these two properties:

Mr. Richmond purchased the Wealthier St. rental property by placing a mortgage on his home. His monthly payments are $450 per month, of which $300 per month represents interest.
(D) Mr. Richmond gifted his wife $10,000 in June 2012 to allow her to invest in the stock market. Mrs. Richmond decided to be a cautious investor for the first while; as a result, she invested the $10,000 in Treasury Bills which earned $600 from June to December 2012.
(E) In addition, Mr. Richmond decided to provide his younger brother, who is 22, with a non-interest bearing loan of $5,000 to allow him to complete his Masters in Marine Biology. Mr. Richmond's brother paid his tuition fees with the funds.
(F) Mr. Richmond gifted $8,500 to each of his twin children, Dolly and Camp, aged 15. Both children placed their monies in high interest-bearing savings accounts each receiving interest of $1,050 in 2012.
(G) Mr. Richmond received dividends from the following investments:
Foreign Co. - a foreign corporation (net of $88 withholding tax).....................$500
Wealth Inc. - a Canadian-controlled private corporation (from income
taxed at the low corporate rate)................................................................800
(H) Mr. Richmond owns two mutual funds, Dumark Mutual Fund and Paget Mutual Fund. He received a T3 slip from Dumark Mutual Fund indicating the following income amounts allocated to his account and reinvested in 2012:
Capital gains............................................................. $1,200
Actual amount of dividends............................................. 347
Taxable amount of dividends............................................ 500
Mr. Richmond had invested $20,000 in the Dumark Fund in 2011. This resulted in the purchase of 1,640.824 units of the fund. In 2011, income of $46.31 was allocated to his account and reinvested. The reinvestment resulted in the purchase of 3.845 units at the market value of $12,044 per unit. The 2012 income allocation resulted, on reinvestment of the $1,545, in the purchase of 119.358 units at the market value of $12,944 per unit. Late in 2012, after the income allocation, Mr. Richmond sold 1,000 units for a total of $12,881.
He also received a T5 slip from Paget Mutual Fund indicating that he had received a $280 capital gains dividend during 2012.
(I) Mr. Richmond sold a $100,000 Government of Canada bond for $115,327. This bond paid interest semi-annually at an interest rate which was much higher than current interest rates. The proceeds received of $115,327 included accrued interest of $5,327. Mr. Richmond had purchased the bonds when they were originally issued for $98,000.
(J) In 2009, Mr. Richmond loaned $120,000 to his brother-in-law's company which was a small business corporation. The loan paid interest at commercial rates, but no interest was received in 2012 because the company went into receivership. As an unsecured creditor, Mr. Richmond received 10 cents on the dollar ($12,000) in 2012 in full payment of this loan.
(K) Mr. Richmond has a listed personal property loss, carried forward from 2006, of $500.
REQUIRED
Determine Mr. Richmond's Division B income according to the ordering rules in section 3 for 2012. Assume that Mr. Richmond claimed $60,000 of his capital gains exemption in prior years. Ignore the effects of the leap year.

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50,053 Salary (net)_. Payrol deduction: $15,100 2,307 840 3,700 e taxes CPP EI Registered pension plan (defined benefit: current service) 21.947 $72,000 Cost Proceeds Antique foot stool . ·····.. Painting $1,100 900 950 500 850 250 City home . Cottage Date purchased 2003 1998 Cost $95,000 15,500 Commission Proceeds $350,000 200,000 $21,000 12,000 Cost of land Cost of building。.. UCC January 1, 2012, Class I . . Rental revenue n 2012...- Expenses Wealthier St $70,000 $55,000 $39,000 $18,000 Rickmount St $100,000 80,000 $ 65,000 $ 7,600 1,800 6,100 Taxes (property). Other expenses Mortgage interest... $ 2,100 4,300 3,600 $10,000 Nil $ 7.900