QUESTION 2 Each of the following independent Cases involves the payment of interest and the issue of whether the interest will be deductible for tax purposes Case A Joan Allenby has owned her home for many years and over this period of time has completely paid off the mortgage. Given the low interest rates that we available on mortgages, she negotiates a $300,000 five year, variable rate mortgage with an interest rate of 25 percent. She invests the entire $300,000 in publicly traded securities Would the interest on the mortgage be deductible? Explain your conclusion Case B Athro Tulee borrows $50,000 and acquires an income producing property for $50.000 He subsequently sells the property for $80,000 Without repaying the funds borrowed to acquire the first property, he uses the proceeds to acquire two other properties. The cost of property is $32,000, while the cost of property is $18.000 How will the $50,000 in borrowing be linked to the two new properties? Case C Janice Bronson borrows $250,000 and invests the entire amount in the shares of Nor Tell Lid Three months later after the discovery of significant accounting regularities of Nor-Tell, the value of the shares has fallen to $30.000 She sells her shares and uses the proceeds to pay off $30,000 of the loan This leaves a balance of $220.000 Cari Janice continue to deduct the interest payments on this $220,000 balance? Explain your conclusion QUESTION 1 Alice Baxtet acquires a residential property on May 1, 2019. The total cost of the property is $385.000 with $95,000 of this total being allocated to the land She spends $3,500 to paint the interior and exteror of the building During 2019, rents total $29.000 and expenses other than CCA and the cost of painting total $20.100. Determine the maximum CCA that is available for 2019. In addition, determine Ms Baxter's minimum net rental income for the year Each of the following independent Cases involves the payment of interest and the issue of whether the interest will be deductible for tax purposes Case A Joan Allenby has owned her home for many years and over this period of time has completely paid off the mortgage. Given the low interest rates that are available on mortgages, she negotiates a $300,000, five year, variable rate mortgage with an interest rate of 25 percent. She invests the entire $300,000 in publicly traded secunties Would the interest on the mortgage be deductible? Explain your conclusion Case B Athro Tulee borrows $50,000 and acquires an income producing property for $50,000 He subsequently sells the property for $80,000. Without repaying the funds borrowed to acquire the first property, he uses the proceeds to acquire two other properties. The cost of property Als $32,000, while the cost of property is $48,000 How will the $50,000 in borrowing be linked to the two new properties? Case C Janice Bronson borrows $250,000 and invests the entire amount in the shares of Nor. Tellid Three months later, after the discovery of significant accounting irregularities at Nor-Tell, the value of the shares has fallen to $30,000. She sells her shares and uses the proceeds to pay off $30,000 of the loan This leaves a balance of $220,000. Can Janice continue to deduct the interest payments on this $220,000 balance? Explain your conclusion QUESTION 2 Each of the following independent Cases involves the payment of interest and the issue of whether the interest will be deductible for tax purposes Case A Joan Allenby has owned her home for many years and over this period of time has completely paid off the mortgage. Given the low interest rates that we available on mortgages, she negotiates a $300,000 five year, variable rate mortgage with an interest rate of 25 percent. She invests the entire $300,000 in publicly traded securities Would the interest on the mortgage be deductible? Explain your conclusion Case B Athro Tulee borrows $50,000 and acquires an income producing property for $50.000 He subsequently sells the property for $80,000 Without repaying the funds borrowed to acquire the first property, he uses the proceeds to acquire two other properties. The cost of property is $32,000, while the cost of property is $18.000 How will the $50,000 in borrowing be linked to the two new properties? Case C Janice Bronson borrows $250,000 and invests the entire amount in the shares of Nor Tell Lid Three months later after the discovery of significant accounting regularities of Nor-Tell, the value of the shares has fallen to $30.000 She sells her shares and uses the proceeds to pay off $30,000 of the loan This leaves a balance of $220.000 Cari Janice continue to deduct the interest payments on this $220,000 balance? Explain your conclusion QUESTION 1 Alice Baxtet acquires a residential property on May 1, 2019. The total cost of the property is $385.000 with $95,000 of this total being allocated to the land She spends $3,500 to paint the interior and exteror of the building During 2019, rents total $29.000 and expenses other than CCA and the cost of painting total $20.100. Determine the maximum CCA that is available for 2019. In addition, determine Ms Baxter's minimum net rental income for the year Each of the following independent Cases involves the payment of interest and the issue of whether the interest will be deductible for tax purposes Case A Joan Allenby has owned her home for many years and over this period of time has completely paid off the mortgage. Given the low interest rates that are available on mortgages, she negotiates a $300,000, five year, variable rate mortgage with an interest rate of 25 percent. She invests the entire $300,000 in publicly traded secunties Would the interest on the mortgage be deductible? Explain your conclusion Case B Athro Tulee borrows $50,000 and acquires an income producing property for $50,000 He subsequently sells the property for $80,000. Without repaying the funds borrowed to acquire the first property, he uses the proceeds to acquire two other properties. The cost of property Als $32,000, while the cost of property is $48,000 How will the $50,000 in borrowing be linked to the two new properties? Case C Janice Bronson borrows $250,000 and invests the entire amount in the shares of Nor. Tellid Three months later, after the discovery of significant accounting irregularities at Nor-Tell, the value of the shares has fallen to $30,000. She sells her shares and uses the proceeds to pay off $30,000 of the loan This leaves a balance of $220,000. Can Janice continue to deduct the interest payments on this $220,000 balance? Explain your conclusion
