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Carl Kay is the vice$-$president of KM Ltd$.,$ a Canadian$-$controlled private corporation located in Halifax, Nova Scotia. KM operates a real

estate development business constructing and selling commercial buildings and residential apartments. Carl's $2023$ financial

transactions include the following.

Carl receives a salary of $$100,000$ from KM$.$ From this amount, KM deducted El and CPP of $$4,756($includes CPP enhanced

contributions of $$631)$ and income tax of $$21,000.$ The company provides him with a car that cost $$50,000$ and that has an

undepreciated capital cost of $$18,000.$ The operating costs of $$3,000$ were paid by KM$.$ In $2023,$ Carl drove the car $20,000km,$

of which $6,000km$ were for employment purposes. KM contributed $$4,000$ on Carl's behalf to a deferred profit$-$sharing plan.

Although KM does not have a group life insurance plan, it pays Carl's personal life insurance premium of $$1,300($coverage $-$

$$75,000).$

During the year, Carl sold $1,300$ shares of KM Ltd$.$ for $$14$ per share. He acquired the shares three years earlier for $$6$ per share

as part of a company stock$-$option plan. At the time of purchase, the shares were valued at $$10$ per share.

In $2022,$ Carl constructed a $10-$suite apartment block. He sold the property in $2023$ for $$800,000,$ which was $$300,000$ more

than the original land and building cost. He received $$80,000$ of the proceeds in cash, with the balance due in five annual

instalments beginning in $2024.$ The property incurred a net rental loss of $$9,400($before amortization$).$

Carl sold his summer cottage for $$119,800$ after it was announced that a waste disposal site would be developed in the area. He

purchased the cottage six years earlier for $$159,700.$

In $2020,$ Carl loaned $$22,000$ to Alloy Ltd$.,$ a Canadian$-$controlled private corporation. All of the company's assets are used in an

active business. The $2022$ interest of $$1,900,$ which Carl included in income, has not been received. The company is in severe

financial difficulty and may not survive beyond next year.

Carl sold shares of a public corporation, purchased in $2021$ for $$16,000,$ for $$26,600.$

In November, Carl received a legal bill for $$2,600$ relating to a dispute over a tax reassessment. Carl paid $$1,500$ in December

$2023$ and the balance in January $2024.$

Carl received eligible dividends of $$2,600$ and non$-$eligible dividends of $$1,300$ from Canadian corporations and $$1,800$ from a

foreign corporation. The foreign corporation remitted a $10\%$ withholding tax to its government.

Carl celebrated his $65$th birthday in December $2023.$ He supports his spouse, who is retired. His spouse has interest income of

$$3,500$ in $2023.$ During the year, Carl made gifts of $$6,000$ to a local charity. He paid tuition fees of $$600$ to attend a three$-$

month evening course at a university.

Carl has used his entire capital gains deduction. At the end of $2022,$ he has unused net capital losses of $$12,000$ and non$-$capital

losses of $$7,000.$

Required:

Calculate Carl's $2023$ net income for tax purposes, taxable income, and federal income tax.Paragraph $3($a$)$ Income

Employment income:

Business income:

$ $106,500$

Property income:

Bad debt $-$ Alloy interest

$ $300,000$

Paragraph $3($b$)$ Capital gains and & Capital losses

Taxable capital gains: Public corporation

Bad debt $-$ Alloy Ltd Loan

Paragraph $3($c$)$ Other deductions

Legal bill $($tax reassessment$)$

CPP enhanced contributions

Paragraph $3($d$)$ Losses

Rental loss

Net Income for Tax purposes

Stock option deduction

Non$-$capital loss

Taxable Income

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