Martha Shine Has Provided You with the Following Information for 20xx

question 2

Essay

Martha Shine has provided you with the following information for 20xx:
She owns rental properties originally valued at $275,000. (Property 1: land $70,000, building $55,000) (Property 2: land $90,000, building $60,000)
The buildings are Class 1 (4%) properties.
-Net rental income before CCA in 20xx was $11,000.
-The UCC on building 1 at the beginning of 20xx was $50,000.
-The UCC on building 2 at the beginning of 20xx was $40,000.
-Property 2 was sold in 20xx for $250,000 (land $200,000, building $50,000)
She owns shares in ABC Inc. (a CCPC) valued at $50,000.
-She received $5,000 in non-eligible dividends on the shares in 20xx.
Martha purchased a 5-year GIC two years ago for $30,000.
-Interest earned in 20xx was $1,000.
Martha worked full-time as a baker in 20xx, earning a gross salary of $45,000.
Martha is in a 45% tax bracket.
Required:
Calculate Martha's net income for tax purposes in 20xx in accordance with Section 3 of the Income Tax Act. Martha will take the maximum CCA allowed this year on her rental properties. (Assume the tax year is 2019.)

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Definitions:

CPP

The Canada Pension Plan, a social insurance program requiring contributions from Canadian workers and employers to provide retirement, disability, and survivor benefits.

QPP

The Quebec Pension Plan, a public retirement plan for individuals in Quebec to provide financial security when they retire.

Employment Insurance (EI)

A social welfare program that provides temporary financial assistance to unemployed workers who meet certain eligibility criteria.

Employees Contribute

The involvement or effort of workers in their job roles, tasks, or towards organizational goals.