Reference no: EM132692796
Questions -
Q1. On July1 ,2018 ,an individual invests $100,000 in a term deposit earning interest at 2% over a three-year term. The term deposit pays the interest by depositing it into the individual's bank account on December 31, 2019, and upon maturity on June 30, 2021.
A corporation with a December 31 year end invests $100,000 beginning on June 30, 2018, in the same term deposit. How much interest income must the individual and the corporation report for the 2019 taxation year? Ignore the effect of compounding.
a) Individual: $3,000, corporation: $2,000
b) Individual: $3,000, corporation: $3,000
c) Individual:$2,000,corporation:$2,000
d) Individual: $2,000, corporation: $3,000
Q2. On March 1 of the current year, Kima disposes of shares for cash proceeds of $80,000 to her spouse, Roca. The shares have a total cost of $200,000 and a fair market value of $80,000. Roca still holds the shares on April 10 of the current year. Which of the following is a tax implication of the transaction?
a) The capital loss for Kima is deemed to be nil.
b) Kima has a capital loss of $120,000.
c) The shares have an adjusted cost base of $80,000 for Roca.
d) Roca has a capital loss of $120,000.
Q3. Zara owns two houses, which she sold in 2019. Both houses were regularly inhabited and exclusively used by Zara.
House in Toronto (purchased in 2004)
Cost $200,000 Selling price $600,000
House in Calgary (purchased in 2012)
Cost $450,000 Selling Price $530,000
What is the minimum taxable capital gain that the Zara must report for 2019?
a) $28,571 b) $30,000 c) $35,000 d) $40,000
Q4. Lynn purchased 100 common shares of an eligible small business corporation (ESBC) on July 2, 2019, for $100,000. The corporation was carrying on an active business in Canada with total assets of $500,000. On October 10, 2019, Lynn sold all 100 common shares for $120,000 and immediately invested $90,000 of the $120,000 in common shares of another ESBC. How much of the capital gain can be deferred?
a) $0
b) $15,000
c) $20,000
d) $90,000
Q5. Juan is a full-time graduate student .He has $5,040 in unused RRSP contribution room carried forward to 2018. In 2018, he received a $20,000 research grant, earned $15,000 through his part-time employment in a restaurant and earned $12,000 of net rental income renting out one of the rooms in his apartment to another graduate student. He has not yet contributed to his RRSP for 2019. What is his RRSP deduction limit for 2019?
a) $8,460 b) $11,340 c) $13,500 d) $15,300