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Question - On January 1, 2019, Rob and Ed form the Robed Partnership. The partnership agreement provides Rob with a 30% share of all profits and losses and other items. Ed initially contributes $40,000 and then makes a further contributions of $20,000 in July 2019. Ed withdraws $27,000 on August 31, 2019. The Robed Partnership makes $10,000 in charitable donations in the year, allocated based on the same % as the share of profits.

The Robed Partnership has the following sources of income for the year ending December 31, 2019:

Net Business Income $300,000

Capital Gain on Sale of Shares $80,000

Actual Eligible Dividends (38% gross-up) Received from Canadian Corporations $15,000

Required -

i. Determine the taxable amount that would be included in Ed's 2019 Net Income for Tax Purposes (NIFT) as a consequence of his interest in the Robed Partnership.

ii. Determine the adjusted cost base of Ed's interest in the Robed Partnership at the end of 2019.

Reference no: EM132986565

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