Reference no: EM132459361

Question 1: B purchased two parcels of land in 20X4 for $70,000 each. Parcel 1 was purchased to hold until its value increased and then offered for sale. Parcel 2 was purchased to build a rental property and collect rents over time. In 20X9 parcel 1 was sold for $60,000 and parcel 2 was sold for $100,000 as part of the rental property sale. Determine the amount that B's net income for tax purposes will increase in 20X9.

Question 2: In the current year, C Inc. had the following expenses: $2,000 legal fee to register a mortgage on its office building, $9,000 for landscaping the land around the office building and $1,000 interest paid to CRA for late tax instalments. The legal fee and landscaping expenses were accrued in the current year and paid in the following year. Determine the amount that C's net income for tax purposes will decrease in the current year due to these expenses.

Question 3: H Inc. incurred (and paid) the following expenses in the current year: $4,000 for hockey tickets to entertain customers, $12,000 for permanent landscaping on the head office grounds, and $2,000 broker's fee to purchase publicly traded securities. Determine the amount deductible for tax purposes in the current year.