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Chapter $8$ Practice Problem

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In $2020,$ Kiranjit Dhillon acquired $1,000$ shares of Pluton Ltd$.($a Canadian public corporation$)$ at a cost of $$22,000$ plus a brokerage commission of $$700.$ During $2020,$ she received cash dividends of $$1,200.$

In $2021,$ Pluton failed to pay the cash dividend owing to a cash flow shortage; instead, it issued a stock dividend, whereby Kiranjit received an additional $100$ shares. At the time of the stock dividend, the share value was $$20$ per share.

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On December $15,2021,$ with the company$$s financial position continuing to decline, Kiranjit sold all of her shares of Pluton for $$16,000.$ She felt relieved when the share values declined further over the next two weeks. She incurred brokerage fees of $$400$ on the sale.

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Early in the new year, Pluton apparently solved its financial crisis by selling an unprofitable subsidiary. Kiranjit$$s broker recommended that she again invest in Pluton$$s shares. On January $11,2022,$ she purchased $1,000$ shares at a cost of $$13,000$ plus brokerage fees of $$200.$

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In June $2022,$ she gifted all of her shares in Pluton to her son, who was about to attend university. At that time, the shares were valued at $$20,000.$

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Required:

Calculate the amount by which Kiranjit$$s net income for tax purposes will be affected by the above transactions for the years $2021$ and $2022.$

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