The following are independent situations: (a) Tony Lee gave $50,000 to his wife, Shannon, for the acquisition

Question:

The following are independent situations:
(a) Tony Lee gave $50,000 to his wife, Shannon, for the acquisition of shares of a Canadian company on the Toronto Stock Exchange. During the year, an eligible of $5,000 cash was paid on the shares owned by Mrs. Lee.
(b) At the beginning of the year in which her daughter Carey turned 18 in December, Ellen gifted $25,000 directly to Carey. Carey invested the $25,000 in an income-bearing investment that paid her interest of $2,500 during the year. In addition to the $2,500, Carey also earned another $7,500 in interest income from monies received from her mother previously.
REQUIRED
What are the tax consequences for the above situations?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...