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Question 1 (1 point)

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Taxpayer A purchased a residential rental property on April 15, 2020. They paid $300,000 cash for the building and an additional $540 for eligible rental expenses during 2020. They rented the property on May 1 to long term tenants for $2,500 per month. On their 2020 tax return what is the net rental income they should report?

Question 1 options:

	$7,918
	$7,378
	$19,460
	$1,460

Question 2 (1 point)

Of the following statements concerning the tax treatment of interest income, which one is NOT correct?

Question 2 options:

	If there is accrued interest on a security, the seller includes the accrued interest in income and the purchaser deducts a corresponding amount from the interest received on the bond
	Accrued interest from the date of the last interest payment date will be added to the purchase price of a security.
	Individuals must accrue interest using the cash basis.
	Corporations must accrue interest on a daily basis.

Question 3 (1 point)

Julio has a savings account in a foreign country. The account earned $5,000 interest during 2020 but he only received $4,500 since $500 for foreign taxes was withheld by the bank. All amounts are stated in Canadian dollars. The effect on Julio's 2020 tax return is:

Question 3 options:

	An increase in taxable income of $5,000 and a foreign tax credit of $75
	An increase in taxable income of $4,500 and a foreign tax credit of $0
	Nothing since the interest was earned outside of Canada
	An increase in taxable income of $5,000 and a foreign tax credit of $500

Question 4 (1 point)

During 2020 Erin received eligible dividends of $800, non-eligible dividends of $600 and foreign dividends of $900 (10% foreign tax or $100 was withheld at source). Her 2020 net property income for tax purposes is:

Question 4 options:

	$2,794
	$2,694
	$2,748
	$2,648

Question 5 (1 point)

Taxpayer A purchased a newly issued $20,000 corporate bond for $19,500 on November 1, 2020. The bond matures on October 31, 2025 and has an annual interest rate is 5% which is paid on October 31 of each year. What is the total interest income taxpayer A must report on their 2020 and 2021 tax returns if they want to minimize the interest recognized for tax purposes?

Question 5 options:

	$0 in 2020 and $1,000 in 2021
	$167 in 2020 and $1,000 in 2021
	$167 in 2020 and $833 in 2021
	$0 in 2020 and $975 in 2021

Question 6 (1 point)

Taxpayer A has two residential rental properties that are mortgaged. Both properties qualify for Class 1 with a CCA rate of 4 percent. At the beginning of the current taxation year, Property A has a UCC of $500,000 and Property B has a UCC of $1,100,000. Before taking into account any CCA for the current year, Property A earned net rental income of $43,000, and Property B had a net rental loss of $27,000. What is the maximum amount of CCA taxpayer A will be able to claim this year?

Question 6 options:

	nil
	$44,000
	$16,000
	$20,000

Question 7 (1 point)

Taxpayer A owns a building and is renting units to tenants. Which one of the following expenditures is not a deduction for tax purposes?

Question 7 options:

	Cost of a new refrigerator.
	Cost of repairing the front stairs.
	Interest paid on the mortgage on the building.
	Cost of painting the interior of a unit.

Question 8 (1 point)

Of the following statements with respect to rental properties, select the one which is NOT correct:

Question 8 options:

	If a new rental property is acquired, put into a separate CCA class, and is used more than 90 percent for non-residential purposes, it is eligible for an enhanced CCA rate of 10 percent.
	The deduction of CCA cannot be used to create or increase a rental loss.
	Every rental property with a cost in excess of $50,000 must be allocated to a separate CCA Class.
	The short fiscal period rules (i.e. a taxation year <365 days) do NOT apply to the calculation of CCA on a rental property owned by an individual.

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