1. Jasper is required to pay quarterly tax installments. He was late on a recent installment and is concerned about potential interest costs. Which of the following statements is CORRECT regarding his situation?

a) There are no interest penalties on late installments.

b) He should appeal to CRA to reduce the interest rate.

c) Jasper should pay his next installment early to help offset the interest cost.

d) He should make an RRSP contribution to reduce the interest owing.

2. With regard to interest charges on late or deficient amounts of income tax owing (excluding instalments), select the statements that are true.

1-Interest charges apply from the due date of the tax payment until the payment is made.

2-Both late filing penalties and interest will be charged.

3-The rate of interest charged is set by Canada Revenue Agency.

4-The rate of interest is reviewed and set annually.

a) 1 and 2

b)1 and 3

c) 2 and 4

d) 3 and 4

3. Which statement properly describes the tax treatment of income received and purchases made by an Indian ("Indian" according to the CRA and the Indian Act)?

a) EI contributions are not required on tax-exempt income earned on a reserve

b) CPP contributions must still be made on employment income that is exempt from taxation

c) Goods or services purchased on the reserve are exempt from the GST and/or HST

d) Old Age Security (OAS) benefit payments are tax-exempt when received on the reserve

4. Ken invested $30,000 in RTB Inc common shares. At the time of purchase, the share price was $30 and Ken purchased 1,000 shares. The investment performed very poorly, and Ken subsequently sold the shares when the fair market value (FMV) was $15,000. Two weeks later, RTB was trading at $10 per share, and Ken's wife, Jenna, purchased 1,000 shares. Jenna held the shares for over a year, and subsequently sold the shares at market price when the FMV was $20 per share. Which statement properly describes the outcome of this situation?

a) Ken must declare a taxable capital gain of $5,000

b) Jenna has an allowable capital loss of $2,500

c) Jenna must declare a capital gain of $10,000

d) Ken has an allowable capital loss of $12,500