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Section B - Multiple Choice

Where a calculation is required, 1 mark will be given for the correct answer and 1 mark for the correct calculation.

Question 8 (2 points)

A business acquires a rental property several years ago for $665,000, with $150,000 of this amount being the estimated value of the land. At the beginning of the current year the UCC for the property is $437,165. During the current year, the property is sold for $900,000, with $285,000 of this amount being allocated to the land. Which of the following statements is correct?

Question 8 options:

a)	The business will have recapture of $77,835 and a capital gain of $135,000.

b)	The business will have recapture of $77,835 and a capital gain of $235,000.

c)	The business will have recapture of $227,835.

d)	The business will have a taxable capital gain of $235,000.

Question 9 (2 points)

Raptors Inc. began operations on October 1 of the current year. It has chosen December 31 as its year end. On November 1 of the current year, the proprietorship purchased furniture and fixtures for $80,000. The maximum capital cost allowance on the furniture and fixtures for the current year ending December 31 will be:

Question 10 (2 points)

Claudette is the proprietor of a home-based business. She paid $30,000 to her administrative assistant, $7,000 to her daughter as her software technician, and $44,000 to herself as salary. How much can she deduct as a business expense on her income tax return?

Question 11 (2 points)

Hector has two residential rental properties that are mortgaged. Both properties are in Class 1 with a CCA rate of 4 percent. At the beginning of the year, Property A has a UCC of $650,000 and Property B has a UCC of $1,350,000. Before consideration of CCA, Property A earned net rental income of $61,000, and Property B had a net rental loss of $49,000. What is the maximum amount of CCA Hector will be able to claim this year?

Question 12 (2 points)

David sold the following assets during the current year:

Item	Sales Price	Cost
Painting	$2500	$800
Coin Collection	$800	$1200
Electric Mower	$700	$250
Antique Chair	$1100	$1700

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