Linda Cadwell has been divorced for several years and has

Linda Cadwell has been divorced for several years and has custody of her two children: Rory who is 10 years old in the year and and Jamie who is 6 years old in the year. Neither child had any income in the year. You are provided with the following information for the year: Mrs. Cadwell is the vice-president for Marketing with A Ltd. which is a public corporation; A Ltd. offered her the following benefits in order to entice her to join its staff in the previous year: Interest-free loan of $75,000, granted on October 10th of the previous year, for the purchase of a new residence in B.C.. Until that date, she had lived in the city of Charlottetown, Prince Edward Island, where she had another job. Assume there are no moving costs to deduct. The conditions of the loan are as follows: principal repayment of $10,000 on June 30 of each year. Assume that the prescribed interest rate for employees at the time of the loan was 3% and that in this particular year, the prescribed interest rates for loans to employees were as follows: 1st and 2nd quarter 3%

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