On January $2,2024,$ the automobile Jonathan Blount was driving was in an accident. Jonathan$$s two sons, Dirk aged $15$ and Cole aged $13,$ were also in the automobile at the time of the crash. Cole suffered a broken leg, Dirk suffered a spinal cord injury, and Jonathan suffered injuries so severe that he died in the ambulance on the way to the hospital.

Jonathan was the manager of a Regina, Saskatchewan, family grocery store started by his grandfather. In his will, Jonathan named his wife, Maria, as his executor and left his total estate to her.

Maria Blount is $53$ years old. In addition to Dirk and Cole, she has two daughters, Elena aged $23$ and Trish aged $17.$ Elena is enrolled in the accounting program at Athabasca University in Alberta.

After Jonathan$$s death, Maria decided to move her family to Calgary, Alberta, for a number of reasons. The rehabilitation services she needed for Dirk were available in a Calgary hospital, the air travel connections for her promotional activities were better from Calgary, and Maria$$s parents lived near Calgary.

Maria listed her Regina home for sale in February $2024.$ She and Jonathan jointly purchased the house for $$105,000$ in $2004.$ They spent $$25,000$ in capital renovations over the years.

The house was sold for $$305,000.$ Real estate fees totaled $5\%$ of selling price and legal fees

associated with the sale were $$1,250.$

On March $14,2024,$ Maria few to Calgary, business class, at a cost of $$1,800$ return to locate a new residence for her and her Family. During the four days that she was there, her food and lodging costs totaled $$1,220.$ After returning home on March $20,2024,$ she made an offer on a newly built property for $$1\mathrm{.}2$ million. The offer was accepted on March $20,2024,$ with a closing date of March $22,2024.$ Maria, her children, and her dogs left Regina on March $29,2024,$ in her SUV. They spent the night in Medicine Hat, Alberta, and arrived in Calgary on March $30,2024.$ The trip was $812$ kilometres. Assume the kilometre rate for all provinces is $$0\mathrm{.}55$ in $2024.$

Maria$$s bill for the Medicine Hat hotel totalled $$1,270$ for four identical rooms $($Dirk and Cole were willing to share a room$),$ dinner, and breakfast for her and her family.

Unfortunately, her new Calgary home was not ready for occupation until April $2,2024,$ and, as a consequence, Maria and her children stayed in a Calgary hotel from March $31$ up to and including April $2,2024.$ This time Dirk and Cole were unwilling to share a room, so the total lodging bill, Including Meals was $ $1,800.$ The cost for moving Maria$$s household effects totaled $$2,340.$ The unplanned additional cost of leaving them in storage until her Calgary home was ready totaled $$150.$

The cost of shipping her sports car to Calgary was $$575.$ Her legal fees associated with purchasing the Calgary home were $$900.$

Business Information

Maria was the author of a popular series of romance novels that had many devoted followers impatiently waiting for the next book. For $2024,$ the details of her business were as follows:

Book royalties $($of which $$75,000$ were paid in February $2025$ the remainder

was paid in December $2024)$ $$287,000$

Assistant$$s fees $($Note $1)36,000$

Research purchases $($Note $2)2,250$

Promotional travel expenses $($Note $3)14,850$

Business cell phone charges $`600$

Purchase of new office furniture $8,400$

Purchase of new desktop and laptop equipment $8,000$

Purchase of new iPad Pro $1,800$

Office supplies $3,480$

Note $1$ The fees were paid to Elena at the rate of $$25$ an hour. She did the accounting for Maria$$s business. She also proofread the manuscripts and, due to her keen interest suggested corrections and revisions.

Note $2$ Maria had been approached to write a movie or mini$-$series based on her books. To prepare, she purchased access to TV series and movies that were similar to her books. She and Elena viewed all of her purchases and made many notes for a pilot episode for a new series. She gave them all away to be sold at the local high school$$s fundraising sale.

Note $3$ MMaria$$s publisher reimbursed her $100\%$ for her travel expenses. She was very popular at book fairs and book readings and her public appearances always resulted in a major increase in sales.

At Elena$$s insistence, Maria$$s very old computer$$s hard disk was wiped clean and recycled along with all of her old computer peripherals. Her only UCC balance as at January $1,2024,$ was $$150$ for class $50.$ The capital cost of the class $50$ property to be recycled totaled

$$2,700.$

As she did her writing in Regina on the kitchen table and in bed, she did not claim any workspace in the home expenses prior to April $1,2024.$ Due to the increasing success and

scope of her work, Maria decided that she and Elena needed to have dedicated office space in Calgary.

Maria$$s office occupied $22\%$ of the total livable $$oor area of her Calgary home including a component for common areas. Her $2024$ home expenditures for April $2,2024,$ to December $31,2024,$ were as follows:

Mortgage interest $$24,000$

Utilities $5,600$

Municipal property tax $11,500$

House insurance $1,600$

House repair costs $2,800$

House cleaning $3,100$

Home telephone land line $750$

Home internet service $960$

As she does not wish to have to report any capital gain or recapture upon its eventual disposition, Maria will not claim any CCA on the portion of her home that is used for her office. She estimates that $40\%$ of her home internet service is used for business purposes Other Information

$1.$ In February $2024,$ Maria was surprised to receive a $$15,000$ cheque from the grocery

store where Jonathan had worked. She learned it was a death benefit.

$2.$ In March $2024,$ she received a $$50,000$ cheque from her sister, Teresa. Teresa had raised the money through a GoFundMe online campaign to help pay for Dirk$$s medical expenses. Jonathan was a volunteer hockey coach who was well loved by the many children he had coached over the years and their parents. The donations came in from all over Canada.

$3.$ Maria$$s mother, Betty Lou, was diagnosed with terminal cancer. She and Maria$$s father had run a very successful real estate $$rm for over $25$ years. On July $1,2024,$ Betty Lou gifted $1,000$ of her company$$s preferred shares to each of her grandchildren. The $4,000$ shares had a total FMV of $$1,000,000.$ The shares paid quarterly eligible dividends of $$4$ per share in each of September and December $2024.$ At the end of $2024,$ Betty Lou was under hospice care.

$4.$ Child care expenses were necessary for Cole when Maria was away promoting her books. They totaled $$3,900$ for $2024.$ In the summer, Cole spent four weeks in July $2024$ at a hockey camp in Canmore, Alberta. The fees at this camp were $$1,000$ a week. Trish spent the same four weeks at a music camp in Banff, Alberta. The fees at this camp were $$800$ a week. Maria spent the four weeks travelling and promoting her work.

$5.$ Maria$$s stock trading portfolio experienced $21\%$ growth in $2024.$ Before Jonathan$$s death they had separate discount broker accounts. They had different tolerances for risk, with Jonathan invested in a low$-$risk portfolio and Maria invested in a high$-$risk one. At the time of

his death, Jonathan$$s investments had an ACB of $$378,000$ and a FMV of $$401,000.$ They were transferred to Maria$$s account in compliance with his will. On the transfer date, they had a FMV of $$408,000.$

$6.$ In September $2024,$ Maria sold every share from Jonathan$$s estate for a total of

$$392,000.$ In addition, she sold shares in a cannabis company for $$26,600$ that she had purchased at a cost of $$11,000.$ Prior to September $2024,$ the inherited shares paid eligible dividends of $$12,600.$

$7.$ In $2024,$ Maria made a $$6,000$ contribution to her TFSA and a $$6,000$ contribution to Elena$$s TFSA. She also made a $$6,000$ contribution $($$$2,000$ per minor child$)$ to the family RESP.

$8.$ After the accident, the doctors who operated on Dirk said he would likely never walk or regain the use of his arms. He took this as a challenge and vowed that he would play hockey again.

He wanted continual physiotherapy to help him achieve this goal. Maria used $$46,000$ of the money received through the GoFundMe campaign to pay for physiotherapists. By the end of December $2024,$ Dirk was encouraged after regaining some feeling in his hands, but he could not move them by himself. A doctor signed a T$2201$ Disability Tax Credit Certi$$cate certifying that Dirk met the disability requirement in $2024$

$.$ Maria used the remaining $$4,000$ of the GoFundMe money to pay for grief counselling by

psychiatrists for herself, Trish, Dirk, and Cole. Elena paid for her own medical expenses. The family$$s medical expenses that were paid by Maria in $2024$ were as follows:

Maria $ $2,600$

Trish $2,800$

Dirk $($including $$9,300$ attendant care costs$)56,700$

Cole $4,100$

Total medical expenses $$66,200$

Required:

A$.$ Determine Maria$$s $2024$ net income, taxable income, federal income tax payable, and her CPP liability for $2024.$ Ignore immediate expensing and any GST$/$HST & PST considerations.

B$.$ Calculate the increase in $2024$ net income arising from the eligible dividends received by each of the four children