With respect to rental properties with a cost greater than $50,000, a taxpayer can elect to allocate each such property to a separate CCA Class

True

False

Steve is the proprietor of a sporting goods retail business. By chance, he discovered on the Internet a used boat for sale for $4,000, a bargain price. He purchased the motor boat and immediately sold it for a profit of $3,000. He did not use the boat. Which of the following best describes the tax treatment of this transaction?

a. The motor boat purchase is an adventure or concern in the nature of trade, and the sale results in business income.

b. The motor boat purchase is an investment, and the sale result in a taxable capital gain.

c. The motor boat purchase is an adventure or concern in the nature of trade, and the sale result in a taxable capital gain.

d. The motor boat purchase is an investment, and the sale results in property income.

Which one of the following items is NOT deductible in computing the income of a business under Division B of the income tax act?

a. The premium on a $100,000 term life insurance policy on an employee if the beneficiary of the policy is the employee's family.

b. Amounts paid for landscaping business premises.

c. Interest on money borrowed to finance the purchase of a factory for use in the business.

d. Interest and penalties on late income tax payments.

A business with a calendar year taxation year, begins operations on December 1 of the current year. On that date it acquires $20,000 in Class 8 assets. Ignoring the Accelerated Investment Incentive, the Maximum CCA for the current year on Class 8 assets would be $2,000.

True

False

During the year, Mike received two cheques, one in the amount of $20,000, the other in the amount of $8,500. The $20,000 cheque was a dividend from business income taxed at the low corporate rate of a Canadian controlled private corporation. The $8,500 cheque was a dividend from a foreign corporation, net of the $1,500 of foreign tax withheld by the foreign country from the dividend payment. Which of the following amounts must Mike include in his income for Canadian income tax purposes?

a. $30,000

b. $33,000

c. $20,000

d. $28,500

Loss carry overs should always be used to reduce Taxable Income to nil.

True

False

For purposes of determining CCA, the capital cost of an asset includes any amounts of GST, HST, or PST that was included in the amount paid for the asset.

True

False

In situations where an enterprise chooses not to take maximum CCA, the amount that is taken should be deducted from the CCA Classes with the lowest rates.

True

False