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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 $$104,500$ from KM$.$ From this amount, KM deducted EI and CPP of $$4,756($includes CPP enhanced contributions of $$631)$ and income tax of $$21,000.$ The company provides him with a car that cost $$35,000$ and that has an undepreciated capital cost of $$18,000.$ The operating costs of $$3,000$ were paid by KM$.$ In $2023,$ Carl drove the car $20,000$ km$,$ of which $9,000$ km were for employment purposes. KM contributed $$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 $$1,100($coverage $$ $$75,000).$

During the year, Carl sold $1,100$ shares of KM Ltd$.$ for $$10$ per share. He acquired the shares three years earlier for $$6$ per share as part of a company stock$-$option plan. At the time of purchase, the shares were valued at $$8$ per share.

In $2022,$ Carl constructed a $10-$suite apartment block. He sold the property in $2023$ for $$800,000,$ which was $$200,000$ more than the original land and building cost. He received $$80,000$ of the proceeds in cash, with the balance due in five annual instalments beginning in $2024.$ The property incurred a net rental loss of $$7,700($before amortization$).$

Carl sold his summer cottage for $$99,000$ after it was announced that a waste disposal site would be developed in the area. He purchased the cottage six years earlier for $$132,000.$

In $2020,$ Carl loaned $$18,000$ to Alloy Ltd$.,$ a Canadian$-$controlled private corporation. All of the company$$s assets are used in an active business. The $2022$ interest of $$1,500,$ 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 $$13,200,$ for $$22,000.$

In November, Carl received a legal bill for $$2,200$ relating to a dispute over a tax reassessment. Carl paid $$1,300$ in December $2023$ and the balance in January $2024.$

Carl received eligible dividends of $$2,200$ and non$-$eligible dividends of $$1,100$ 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 $$3,000$ in $2023.$ During the year, Carl made gifts of $$4,000$ to a local charity. He paid tuition fees of $$800$ 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.$

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Paragraph $3($a$)$ Income

Employment income:

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