Reference no: EM132751084

Questions -

Q1. Rushmore Ltd., with a tax year that ends on Dec 31, has a class 10 (30%) UCC balance on January 1, 2020 of $38000. During 2020, it acquired 20 class 10 cars that are eligible for the accelerated investment incentive. The total cost of all the cars was $155000. The Company also disposes of 15 cars for total proceeds of $61000. In no case did the proceeds of disposition exceed the capital cost of the vehicle being disposed of. Determine the maximum Class 10 CCA that Rushmore Ltd. can deduct for 2020. Round to the nearest dollar. Do NOT write commas, dollar signs, or decimals in your response.

Q2- Sherry owned a rental property. She originally acquired the property for $260,000 with $200,000 of the cost attributed to the building.

Over the years, Sherry has claimed CCA of $32,000, such that her UCC at the beginning of the year was $168,000. The rental property is the only asset in the class.

This year, she sold the property for $214,000, with $160,000 of the sale price attributed to the building.

Which of the following statements is correct?

A. Sherry has a terminal loss of $8,000.

B. Sherry has a capital loss of $36,000.

C. Sherry has an allowable capital loss of $4,000.

D. Sherry has CCA recapture of $32,000.

Q3- On December 1 of the previous year, a corporation spends $126,000 on leasehold improvements to a building which it rents for use in its business activities.

The lease was signed in the previous taxation year and has a term of 10 years. There are two renewal options, each for a term of 3 years.

What is the maximum CCA claim on these improvements for the current taxation year, which ends December 31?

A. $12,600.

B. $9,692.

C. $4,846.

D. $6,300.