Henry Bond has provided you with the following details of his investment performance during 2021.

(1) Mr. Bond purchased a 180-Day T-bill on April 2, 2021 for $145,631. On maturity, he received $151,000. He then re-invested the funds in another 180-day T -bill that will mature at $155,400.

(2) On June 30, 2020 he purchased a $300,000 5% 4-year GIC. It is a compound interest GIC. The interest details on this GIC for 2021 are as follows:

Interest for the period July I, 2020 through June 30, 2021........................ $15,000

Interest for the period January 1, 2021 through December 31, 2021............... 15,378

(3) He holds a number of corporate bonds. These bonds pay interest semi annually on June 30 and December 31 each year.

The total interest paid on the bonds in 2021 was $69,675.

(4) He received the following dividend income during 2021:

From taxable Canadian corporations.................................................... $14,000

From US corporations (net of 15% withholding tax)................................. $17,000 Cdn

(5)Mr. Bond holds two rental properties. The following is a summary of the income and expenses related to these properties for 2021:

Proprety 1 Property 2

Gross rents $36,000 $12,000

Property taxes 3,920 2,450

Interest 14,560 7,540

Insurance 1,600 850

Repairs and maintenance 8,450 9,500

At the end of 2020, the undepreciated capital cost balances were $295,302 for Property I and $201,957 for Property 2 respectively.

(6) In December 2021, Mr. Bond sold property I. He received $300,000 for the building portion of the property (after all costs) on the sale.

(7) During the year, he sold two of the bonds in his portfolio. On the sales he received $56,930 (including accrued interest of $5,830) and $74,209 (including accrued interest of $3,476), respectively. The original purchase prices were $49,508 and $72,845, respectively. The accrued interest has not been included in other interest amounts for 2021.

(8) Mr. Bond was cleaning out his attic and found a valuable painting that had belonged to his grandfather. He sold the painting for $59,000. The painting was estimated to he worth $12,000 when he inherited it.

(9) In 2021 Mr. Bond received a cash dividend on his preferred shares of $12,000 from an investment of $200,000 in the preferred shares of a taxable Canadian corporation. These shares bear a fixed annual dividend rate of 4%. This dividend income has not been included in any of the other dividend amounts reported above. Mr. Bond borrowed the $200,000 to make this investment. He paid interest of $18,000 on this investment loan during 2021.

(10) Mr. Bond had the following investment-related expenditures during 2021:

Interest to purchase common shares still held at year-end.......................... 14,000

(11) Mr. Bond incurred a listed personal property loss of $8,800. This amount could not be used and was carried forward to 2021.

Required:

• Calculate Mr. Bond's income from property for 2021.
• Calculate the net taxable capital gain for 2021.
• Comment on any items not used in your calculations.

Answer rating: 100% (QA)

Solution To calculate Mr Bonds income from property for 2021 we need to subtract the expenses from t... View the full answer