Reference no: EM132669599

Problem 1. A depreciable property is sold by a taxpayer at a price below its capital cost, with no assets remaining in the related CCA class and resulting in a negative UCC balance. What is the tax consequence?

a) Terminal loss

b) Capital loss

c) Capital gain

d) Recapture

Problem 2. An individual earns business income and property income. Which of the following statements regarding the distinction between business income and property income is true?

a) Attribution rules apply to both property income and business income.

b) Attribution rules apply to business income but not to property income.

c) The short-year pro-ration for capital cost allowance applies to the computation of business income, not property income.

d) The short-year pro-ration for capital cost allowance applies to the computation of property income, not business income.