A sofa $($personal use property$)$ that had been purchased for $$600$ was sold during the year. The proceeds of disposition totaled $$700.$ The capital gain on the transaction is $$100.$

Question $5$ options:

a$)$ Trueb$)$ False

Question $6(1$ point$)$

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A sofa that had been purchased for $$600$ was sold during the year. The proceeds of disposition totaled $$500.$ The allowable capital loss on the transaction is $$100.$

Question $6$ options:

a$)$ Trueb$)$ False

Question $7(1$ point$)$

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A sofa that had been purchased for $$600$ was sold during the year. The proceeds of disposition totaled $$1,500.$ The taxable capital gain on the transaction is $$250.$

Question $7$ options:

a$)$ Trueb$)$ False

Section B $-$ Multiple Choice

Where a calculation is required, $1$ mark will be given for the correct answer and $1$ mark for the correct calculation.

Question $8(2$ points$)$

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A business acquires a rental property several years ago for $$665,000,$ with $$150,000$ of this amount being the estimated value of the land. At the beginning of the current year the UCC for the property is $$437,165.$ During the current year, the property is sold for $$900,000,$ with $$285,000$ of this amount being allocated to the land. Which of the following statements is correct?

Question $8$ options:

a$)$

The business will have recapture of $$77,835$ and a capital gain of $$135,000.$

b$)$

The business will have recapture of $$77,835$ and a capital gain of $$235,000.$

c$)$

The business will have recapture of $$227,835.$

d$)$

The business will have a taxable capital gain of $$235,000.$

Question $9(2$ points$)$

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Raptors Inc. began operations on October $1$ of the current year. It has chosen December $31$ as its year end. On November $1$ of the current year, the proprietorship purchased furniture and fixtures for $$80,000.$ The maximum capital cost allowance on the furniture and fixtures for the current year ending December $31$ will be:

Question $9$ options:

a$)$

$$1008\mathrm{.}22$

b$)$

$$2016\mathrm{.}44$

c$)$

$$8000$

d$)$

$$16,000$

Question $10(2$ points$)$

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Claudette is the proprietor of a home$-$based business. She paid $$30,000$ to her administrative assistant, $$7,000$ to her daughter as her software technician, and $$44,000$ to herself as salary. How much can she deduct as a business expense on her income tax return?

Question $10$ options:

a$)$

Nil

b$)$

$$30,000$

c$)$

$$37,000$

d$)$

$$81,000$

Question $11(2$ points$)$

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Hector has two residential rental properties that are mortgaged. Both properties are in Class $1$ with a CCA rate of $4$ percent. At the beginning of the year, Property A has a UCC of $$650,000$ and Property B has a UCC of $$1,350,000.$ Before consideration of CCA, Property A earned net rental income of $$61,000,$ and Property B had a net rental loss of $$49,000.$ What is the maximum amount of CCA Hector will be able to claim this year?

Question $11$ options:

a$)$

Nil

b$)$

$$12,000$

c$)$

$$40,000$

d$)$

$$80,000$

Question $12(2$ points$)$

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David sold the following assets during the current year:

ItemSales PriceCostPainting$$2500$$$800$Coin Collection$$800$$$1200$Electric Mower$$700$$$250$Antique Chair$$1100$$$1700$

Which one of the following amounts represents his taxable capital gain, net of allowable capital losses, for tax purposes during the current year?

Question $12$ options:

a$)$

$$325$

b$)$

$$575$

c$)$

$$650$

d$)$

$$1150$