Introduction to Federal Income Taxation in Canada 43rd Edition 2022-2023

Edition by Nathalie Johnstone , Devan Mescall , Julie Robson Test bank Sample

5) Cherizia Gold presents the following information with her 2022 tax return:

What is the minimum taxable capital gain (rounded to the nearest dollar) to be reported on Cherizia’s tax return?

(a) $1,048

(b) $623 (c) $675 (d) $1,675

6) River Rose, a sole proprietor, purchased an unlimited life franchise (arm’s length transaction) at a cost of $100,000 during 2022. The maximum tax deduction related to the franchise for the taxation year ending December 31, 2022 is:

(a) $2,500

(b) $3,750

(c) $7,500

(d) $10,000

7) On June 1, 2022 Beta Ltd, a CCPC, purchased a franchise for $115,000. The franchise has a limited life of 13 years. Assuming this is the only depreciable asset owned by Beta, which one of the following amounts represents the maximum amount of capital cost allowance that Beta can deduct for its year ended July 31, 2022? Ignore the leap year.

(a) $115,000

(b) $13,269

(c) $2,218

(d) $7,780

8) Lambda sold a capital property on October 31, 2022 for $200,000 with a cash down payment of $15,000. The balance of $185,000 is payable on October 31, 2026. The adjusted cost base of the property was $115,000 and the selling costs were $7,000. Which one of the following amounts represents the minimum taxable capital gain (rounded to the nearest dollar) in 2022?

(a) $39,000

(b) $5,850

(c) $7,800

(d) $15,600