A corporation with a December 31st year-end begins its operations on July 1st, 2018. It has acquired $50,000 of Class 8 assets on this date. The maximum CCA for its fiscal year ending December 31st, 2018 is $5,000.

Question 1 options:

	a) True
	b) False

Which of the following statements regarding recapture is correct?

Question 2 options:

a)	Recapture is deductible in the calculation of business income.

b)	Recapture occurs when there is a positive UCC balance in a class, even if there are assets remaining in the class.

c)	Recapture occurs when there is a negative Undepreciated Capital Cost (UCC) balance in a Capital Cost Allowance (CCA) Class, even if there are assets remaining in the class.

d)	Recapture occurs when there is a positive UCC balance in a class and there are no assets in the class.

The deduction of CCA cannot be used to create or increase a net business loss on a T1 Return.

Question 3 options:

	a) True
	b) False

Eric Jones starts an unincorporated business on December 1, 2018. Which of the following statements is correct with respect to Erics taxation year end?

Question 4 options:

a)	Eric can choose any date for his year end. However, if Jon chooses a non-calendar year end, he will have to adjust his income by an amount referred to as additional business income.

b)	Eric can choose any date for his year end. However, if Eric chooses a non-calendar year end, he will have to report income for his first two fiscal years in his 2019 tax return.

c)	Eric must select November 30th as his taxation year end.

d)	Eric must select December 31st as his taxation year end.

Marie owns a triplex and rents out all three units to different tenants. Which one of the following expenditures is not a deduction for tax purposes?

Question 5 options:

a)	Cost of painting the interior of the basement unit.

b)	Cost of a new stove.

c)	Interest paid on the mortgage on the triplex.

d)	Cost of repairing the outside handrails.

Ranjit owns a residential rental building which he purchased for $300,000 in 2017. In that year, his rental income before CCA was $6,000. In 2018, his rental income before CCA was $12,000. Ranjit always minimizes his tax liability. Which of the following statements is correct?

Question 6 options:

a)	Ranjit has a net rental loss of $2,000 in 2018.

b)	Ranjit has net rental income of nil in 2018.

c)	Ranjit has net rental income of $480 in 2018.

d)	Ranjit has net rental income of $240 in 2018.

One of the reasons for the favourable tax treatment of capital gains is that the amounts received often have to be reinvested in the business in order to maintain its productive capacity.

Question 7 options:

	a) True
	b) False

Steve Chan sold the following assets during the current year:

Item	Sales Price	Cost
Diamond Ring	$1,200	$800
Gold Coin Collection	$1,900	$1,100
Rare Book	$800	$1,100
Vintage Car	$14,500	$15,000

Which one of the following amounts represents his taxable capital gain, net of allowable capital losses, for tax purposes during the current year?

Question 8 options:

a)

$100

b)

$150

c)

$200

d)

$400

In determining whether a gain resulting from a disposition of an asset is capital or business, various criteria have been used. Which of the following considerations would be least likely to affect the decision?

Question 9 options:

a)	Whether the transaction is related to the taxpayers business.

b)	The number and frequency of similar asset dispositions.

c)	Whether the transaction resulted in a gain or loss.

d)	The length of time the asset is held.

e)	Whether the taxpayer knew the investment could be sold for a profit if the investment return was inadequate.

Indicate which of the following is not listed personal property:

Question 10 options:

a)

A stamp.

b)	A rare manuscript.

c)	An antique table.

d)	A piece of jewelry.

e)	A piece of sculpture.