Assignment $2$: Assignment Problem Eight$-7$ and Eight$-8($pages $493$ in the textbook$)$

Graded assignments are worth $3\%$ of your overall grade in this course. In this module, you will complete Assignment $2$: Assignment Problem Eight$-7$ and Eight$-8($pages $493$ in the textbook$).$ Use Excel or Numbers to complete both problems and submit them in the Assignments folder in the Assignments section of this course. This assignment is due by the end of this module.

$1.$ Assignment Problem Eight $7$: $($Principal Residence Designation$)$

Mr$.$ Stewart Simms has lived most of his life in Vancouver. In $1999,$ he purchased a three bedroom home near English Bay for $$125,000.$ In $2004,$ he acquired a cottage in the Whistler ski area at a cost of $$40,000.$ In all subsequent years, he has spent at least a portion of the year living in each of the two locations. When he is not residing in these properties, they are left vacant.

On October $1,2023,$ Mr$.$ Simms sells the English Bay property for $$915,000$ and the cottage at Whistler for $$720,000.$

Mr$.$ Simms wishes to minimize any capital gains resulting from the sale of the two properties.

Required: Describe how the residences should be designated in order to accomplish Mr$.$ Simms$$ goal. In addition, calculate the amount of the taxable capital gain that would arise under the designation that you have recommended.

$2.$ Assignment Problem Eight $8$: $($Personal Use Property$)$

Mr$.$ Firenza owns a number of personal assets, all of which were acquired while he was a resident of Canada. As he plans to spend the next five years travelling the globe, he will be converting most of his possessions to cash. The assets he will be selling in the current year can be described as follows:

He owns a vintage automobile that has been restored to like$-$new condition. He acquired the vehicle for $$42,000$ and has spent $$135,000$ on the restoration process. He estimates the current fair market value of the automobile to be $$320,000.$

He has an extensive coin collection, which has a current fair market value of $$23,500.$ The total cost of all of the coins is $$17,600.$ He believes that the coins can be disposed of without incurring any selling costs.

At her death, his mother left him a rare $17$th century manuscript. His mother had paid $$4,000$ for the manuscript and, at the time of her death, it was estimated that its fair market value was $$42,000.$ However, since the time of the bequest, several other copies of manuscript have been found and, as a consequence, its value has decreased to $$8,500.$

Mr$.$ Firenza owns a Lawren Harris oil painting that he acquired for $$275,000.$ While he believes it could be sold for $$350,000,$ the auction house will charge a commission of $20$ percent of the sales price.

Mr$.$ Firenza owns a sailboat that cost $$162,000.$ He estimates that its current fair market value, net of selling costs, would be $$123,000.$

Mr$.$ Firenza has an antique desk that he acquired for $$600.$ He believes that it could be sold for $$2,200$ and that no selling costs would be incurred.

Required: Mr$.$ Firenza has asked you to determine the amount that would have to be included in his Net Income For Tax Purposes if all of these assets were sold for their estimated values. Indicate any amounts that may be available for carry over to other years.