1. During 2020 Erin received eligible dividends of $800, non-eligible dividends of $600 and foreign dividends of $900 (10% foreign tax or $100 was withheld at source). Her 2020 net property income for tax purposes is:

A. $2,748

B. $2,794

C. $2,648

D. $2,694

2. Taxpayer A owns a building and is renting units to tenants. Which one of the following expenditures is not a deduction for tax purposes?

A. Cost of repairing the front stairs.

B. Interest paid on the mortgage on the building.

C. Cost of painting the interior of a unit.

D. Cost of a new refrigerator.

3. Julio has a savings account in a foreign country. The account earned $5,000 interest during 2020 but he only received $4,500 since $500 for foreign taxes was withheld by the bank. All amounts are stated in Canadian dollars. The effect on Julio's 2020 tax return is:

A. Nothing since the interest was earned outside of Canada

B. An increase in taxable income of $5,000 and a foreign tax credit of $500

C. An increase in taxable income of $4,500 and a foreign tax credit of $0

D. An increase in taxable income of $5,000 and a foreign tax credit of $75

4. Taxpayer A purchased a residential rental property on April 15, 2020. They paid $300,000 cash for the building and an additional $540 for eligible rental expenses during 2020. They rented the property on May 1 to long term tenants for $2,500 per month. On their 2020 tax return what is the net rental income they should report?

A. $19,460

B. $1,460

C. $7,918

D. $7,378

5. Of the following statements concerning the tax treatment of interest income, which one is NOT correct?

A. Corporations must accrue interest on a daily basis.

B. Accrued interest from the date of the last interest payment date will be added to the purchase price of a security.

C. Individuals must accrue interest using the cash basis.

D. If there is accrued interest on a security, the seller includes the accrued interest in income and the purchaser deducts a corresponding amount from the interest received on the bond

6. Of the following statements with respect to rental properties, select the one which is NOT correct:

A. The deduction of CCA cannot be used to create or increase a rental loss.

B. If a new rental property is acquired, put into a separate CCA class, and is used more than 90 percent for non-residential purposes, it is eligible for an enhanced CCA rate of 10 percent.

C. Every rental property with a cost in excess of $50,000 must be allocated to a separate CCA Class.

D. The short fiscal period rules (i.e. a taxation year <365 days) do NOT apply to the calculation of CCA on a rental property owned by an individual.

7. Taxpayer A purchased a newly issued $20,000 corporate bond for $19,500 on November 1, 2020. The bond matures on October 31, 2025 and has an annual interest rate is 5% which is paid on October 31 of each year. What is the total interest income taxpayer A must report on their 2020 and 2021 tax returns if they want to minimize the interest recognized for tax purposes?

A. $167 in 2020 and $1,000 in 2021

B. $0 in 2020 and $975 in 2021

C. $167 in 2020 and $833 in 2021

D. $0 in 2020 and $1,000 in 2021