Tax Final

If Ms. Chu loans Mr. Chu $180,000 to purchase the shares with a formal written agreement, and Mr. Chu pays interest by January 30 each year to Ms. Chu on the loan, which statement will be true?

Jacob owns 5,000 shares of Sentry Inc., a publicly traded company. The ACB on the shares is $20 per share, while today’s market price is $27 per share. If Jacob sells the shares today, what is his taxable capital gain? Ignore commissions costs:

Chuck Lo operates an auto mechanic shop. Chuck purchased the building instead of renting. The cost of the building was $60,000 and its current UCC is $30,000. Chuck sold the building for $75,000. What impact does the sale have on his current year income?

In 2011, Debbie undertook two capital transactions. She disposed of a piece of land resulting in an allowable capital loss of $15,000, and she sold a stock portfolio that resulted in a taxable capital gain of $9,500. Debbie’s net income for 2011 is $83,000, prior to accounting for the capital transactions. In 2009, Debbie realized a $10,000 taxable capital gain. Which of the following statements is true about the two 2011 capital transactions?

Seeking to help financial planning clients add value by alerting them to effective and proven tax planning strategies:

Generally, capital losses realized from selling stocks below ACB:

Three years ago, Darrin bought a motorboat for $9,000. In 2012, he sold it for $7,500. What is the 2012 tax consequence resulting from the disposition of the motorboat?

In 2012, Betty plans to sell her cottage and home and use the funds to purchase a new condo. The cottage’s current market value is $350,000 and was purchased in 1999. Its ACB is $60,000. Betty’s home was also purchased in 1999, and it has an ACB of $250,000 and a current market value of $500,000. Which of the following statements is correct?

Nawt Lichly is a wealthy lawyer who wants to lower his taxes without losing control of his wealth. On January 1, 2008 he made an interest-free loan of $750,000 to his 25-year-old daughter Yabut, and she immediately used the money to purchase 75,000 shares of Itshis Inc., a publicly traded company, which paid dividends of $45,000 in 2011. Yabut had no other income in 2011. What are the tax consequences of the dividends to Nawt Lichly and Yabut for 2011?

For 2011, Jashan’s reduced standby charge and operating cost benefit are:

Harvey purchased two bulldozers (Class 10 – CCA rate of 30%) for a total cost of $58,000. His net income for tax purposes before CCA was $50,000. Harvey always claims the maximum CCA, and the UCC for the asset class prior to purchasing the bulldozers was $33,000. The CCA claims in Year 1 and Year 2 are:

Non-depreciable property includes:

Tax planning:

In Year 3 Harvey sold the bulldozers for $50,000. The UCC at the beginning of Year 3 was $50,680, and after the sale of the bulldozers, there are no assets remaining in the class. Harvey:

The CRA is responsible for:

Smitty, a sole proprietor, sold a customer list for $15,000. His costs associated with the sale of the list were $1,000. What is the impact of this transaction on Smitty’s CEC account.

Brent received a $2,500 dividend from NewTech Inc., a taxable CCPC, and the dividends are non-eligible. Brent will calculate his dividend tax credit as

Three general categories of property are:

Judy owns a recreational sailboat, windsurfer and some jewellery which she decided to sell in 2011 prior to departing on a world cruise. The ACB of her sailboat was $500, the windsurfer was $1,300 and the jewellery was $600. She sold the sailboat for $1,800, the windsurfer for $800 and the jewellery for $850. What will Judy report in reference to these transactions?

Which of the following is NOT true in regard to the topic of AMT calculation?

In 2006, brothers Curly and Moe purchased a cottage. They registered title to the cottage as joint tentants with the right of survivorship. The ACB on the property was $90,000 in total. In 2011, Curly died of complications from an eye infection. If the FMV of the property was established as $125,000 at the time of Curly’s death, which of the following statements would be true?

Mr. James owns shares in a qualified small business corporation with a current ACB and FMV of $65,000. Mr. James expects these shares to increase in value significantly in the coming years. He decided to transfer the shares to his wife. In doing so, he and his wife drew up a written agreement, whereby he loaned her $65,000 at the prescribed rate. Since then, Mrs. James has paid Mr. James interest each year in January. Which statement is true in regards to this transaction.

In 2005 Ms. Chu bought $120,000 of common shares in a public company with an annual dividend of $6,000. Ms. Chu decided to transfer the shares to her husband as a gift when the FMV was $180,000, and did not elect out of a rollover. Which statement is true regarding this transfer?

Henry is a landed immigrant residing in Canada. He owns shares of the U.S. Corporation he worked for prior to his move to Canada, which pay steady and growing dividends. What is the tax treatment for dividends Henry receives for these shares?

_________________ have the exclusive right to impose income taxes in Canada.

Tax evasion:

Carry, a sole proprietor, sold a depreciable asset for $12,000. The original cost of the asset was $20,000. The balance of the UCC pool was $10,000 at the time of sale and there are assets remaining in the class. What are the tax consequences of the sale?

Since incorporation in 1980, ABC Co. has realized capital gains of which $8,500 was the non- taxable portion, and capital losses of which $6,000 was the non-deductible portion. They have recently received a capital dividend from a subsidiary and paid a $2,500 capital dividend to its principal shareholder. What is the balance of the CDA account?

Under CCA guidelines, the three general categories of capital property are:

The three federal departments of the Canadian tax system are: