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Part $1$

Sidney and Steven Ramirez are brothers and engineers. In early $2022,$ they formed a partnership in order to provide a wide array of professional engineering services. When the partnership was$$ formed, each of the brothers made a capital contribution of $ $260$ comma $000$ in cash. They have agreed to share all profits and losses equally.

During the partnership fiscal period ending December$31,2022,$ the partnership had income of $ $240$ comma $000,$ all of which was business income. The partnership made no charitable donations in $2022.$ In $2022,$ Sidney withdrew $ $89$ comma $000,$ while Steven withdrew $ $25$ comma $000.$

The$$ partnership's $2023$ income$$ statement, prepared in accordance with$$ ASPE, is as follows.

$2023$ Income Statement

Income Statement

Sidney and Steven Ramirez Partnership

Fiscal Period Ending December $31,2023$

Revenues

$$810,000$

Operating Expenses:

Rent

$$(61,000)$

Amortization Expense $($Note $1)$

$(21,000)$

Office Salaries

$(51,000)$

General Office Expenses

$(16,000)$

Meals and Entertainment Expenses

$(26,000)$

Charitable Donations

$(25,000)$

Total Operating Expenses

$(200,000)$

Operating Income

$$610,000$

Other Income:

Gain on Sale of Investments $($Note $2)$

$$18,000$

Eligible Dividends Received From Canadian Corporations

$7,000$

Total Other Income

$25,000$

$2023$ Total Income

$$635,000$

Note$1$: Maximum $2023$CCA$,$ which the partners fully intend to$$ claim, is $ $22$ comma $000.$

Note$2$: The gain resulted from the sale of temporary investments. The investments had an ACB of $ $83$ comma $000$ and were sold for $ $101$ comma $000.$

Other information

$1.$

In $2023,$ Sidney withdrew $ $246$ comma $000$ from the$$ partnership, while Steven withdrew $ $361$ comma $000.$

$2.$

In $2023,$ Steven$\text{'}$s only income other than amounts related to the partnership was eligible dividends received from Canadian companies totalling $ $44$ comma $000.$ Assume that other than credits related to partnership allocations and the eligible dividends he received$$ personally, Steven$\text{'}$s only tax credit was his BPA.

$3.$

On January$1,2024,$ Steven sells his interest in the partnership to an$$ arm's$-$length individual for $ $650$ comma $000.$

Calculate the $2023$ business income of the partnership.

Operating Income

Additions:

Amortization Expense

One$-$Half Meals and Entertainment

Charitable Donations

Total Additions

Deductions:

CCA

$2023$ Business Income

Part $2$

$$Next$,$ calculate Steven$\text{'}$s taxable income as well as his share of the charitable donations.

Partnership

Share

Taxable Income

Partnership Business Income

$(1-$: $2)$

Taxable Capital Gain

$(1-$: $2)$

Partnership Dividends Received

$(1-$: $2)$

Dividends Received Personally

N$/$A

Gross Up on Eligible Dividends

N$/$A

$2023$ Taxable Income

Charitable Donations

$(1-$: $2)$

Part $3$

Determine Steven$\text{'}$s $2023$ federal income tax payable. $($Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative$$ values.$)$

Tax on the first $$235,675$

Tax on additional $$157,875$ at $33\%$

Tax Payable before Credits

Basic Personal Credit

Dividend Tax Credit

Charitable Donations Tax Credit

$2023$ Federal Income Tax Payable

Part $4$

$$Now$,$ calculate the ACB of Steven$\text{'}$s partnership interest on January$1,2024.($Use parentheses or a minus sign for negative$$ values.$)$

Partnership

Share $(50\%)$

ACB

Capital Contribution

N$/$A

$2022$ Partnership Business Income

$2022$ Drawings

N$/$A

$2023$ Drawings

N$/$A

December $31,2023$ Balance

$2023$ Partnership Business Income

$2023$ Capital Gain

$2023$ Partnership Dividends Received

$2023$ Charitable Donations

January $1,2024,$ ACB

Part $5$

$$Lastly$,$ calculate the taxable capital gain on Steven$\text{'}$s sale of the partnership interest. $($Use parentheses or a minus sign for negative$$ values.$)$

POD

ACB

Capital Gain

Inclusion Rate

$1-$: $2$

$2024$ Taxable Capital Gain

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