Property Income

1. On July 1, 2021, Ms. Gloria Hennings acquired a newly issued debt instrument with a maturity value of $80,000. It matures on June 30, 2027, and pays interest at an annual rate of 8%. Payment for the first three years of interest is due on June 30, 2024, with interest for the remaining three years payable on the maturity date.

What amount of interest will Ms. Hennings have to include in her tax returns for the year of the years 2021 through 2027? (Note: Do not use compounding interest rate)

Year Interest included in Income

2021

2022

2023

2024

2025

2026

2027

2. Ms. Maggie Hades owns a residential rental property that she acquired several years ago for $310,000. The beginning UCC of class 1 in 2022 is $299,800. Rents for the year total $36,000, while rental expenses other than CCA total $22,000.

She also acquires a second residential rental property in March 2022 at a total cost of $220,000. Of this total, $53,000 can be allocated to the value of the land.

Her rental income for the year totals $28,000. Rental expenses are $3,300 for property tax, $2,600 for utilities, and $2,100 for repairs and maintenance.

Determine the maximum CCA that is available for 2022 and Ms. Hade's minimum net rental income for the year.

3. Ms. Tina Rae receives $18,000 in eligible dividends and $21,000 in non-eligible dividends from taxable Canadian corporations.

Determine the amount that will be included in Eloises net income for tax purposes.

4. Loisa Dewe works for a large Canadian corporation. Her net employment income is $137,400 in 2022. In addition to this employment income, she has the following sources of property income.

On February 1, 2020, Loisa Dewe acquired a newly issued debt instrument with a maturity value of $70,000. It matures on January 31, 2024, and pays interest at an annual rate of 7%. Interest is paid at maturity.

Loisa receives $42,000 in eligible dividends and $23,000 in non-eligible dividends from taxable Canadian corporations. She borrowed $250,000 from her home equity line of credit to purchase these shares. The interest paid on this loan in 2022 was $10,000.

Loisa owns a residential rental property that she acquired several years ago for $210,000. The beginning UCC of class 1 in 2022 is $147,800. Rents for the year total $16,000, while rental expenses other than CCA total $11,200.

Determine Loisa's net income for 2022.