TX2 exam
CGA-CANADA
ADVANCED PERSONAL & CORPORATE TAXATION [TX2] EXAMINATION
June 2009
Marks
Time: 4 Hours
Notes:
1.
2.
3.
4.
20
This examination is based on the Canadian Income Tax Act (ITA) and its Regulations consolidated to July 2008.
To clarify your answers, you may reference them to the applicable provisions of the ITA and its Regulations (except for Question 1, which is a multiple-choice question).
Round all calculations to the nearest dollar.
All calculations must be shown in an orderly manner to obtain full marks.
Question 1
Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations.
Note:
2 marks each
a.
Chestnut Ltd. has a November 30 year end. On August 15, 2008, Chestnut declared a $55,000 bonus for the sales manager, Claudine. By what date must the bonus be paid in order for Chestnut to claim the deduction in computing its income for the fiscal period ended November 30, 2008?
1)
2)
3)
4)
February 11, 2009
May 29, 2009
June 29, 2009
No time limit
b. Trapeze Inc., a Canadian private corporation, was wound up during the year. In the winding-up, it transferred a depreciable property to a shareholder with whom it was dealing at arm’s length. The property had a capital cost of $65,000 and a fair market value of $22,000. It was the only property in the class, which had an undepreciated capital cost of $50,000. What is the capital cost of the property for the shareholder?
1)
2)
3)
4)
c.
$22,000
$28,000
$50,000
$65,000
In 2009, Prairie Inc., which was in financial difficulty, reached an agreement with a creditor to pay
$130,000 in settlement of a debt
ADVANCED PERSONAL & CORPORATE TAXATION [TX2] EXAMINATION
June 2009
Marks
Time: 4 Hours
Notes:
1.
2.
3.
4.
20
This examination is based on the Canadian Income Tax Act (ITA) and its Regulations consolidated to July 2008.
To clarify your answers, you may reference them to the applicable provisions of the ITA and its Regulations (except for Question 1, which is a multiple-choice question).
Round all calculations to the nearest dollar.
All calculations must be shown in an orderly manner to obtain full marks.
Question 1
Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations.
Note:
2 marks each
a.
Chestnut Ltd. has a November 30 year end. On August 15, 2008, Chestnut declared a $55,000 bonus for the sales manager, Claudine. By what date must the bonus be paid in order for Chestnut to claim the deduction in computing its income for the fiscal period ended November 30, 2008?
1)
2)
3)
4)
February 11, 2009
May 29, 2009
June 29, 2009
No time limit
b. Trapeze Inc., a Canadian private corporation, was wound up during the year. In the winding-up, it transferred a depreciable property to a shareholder with whom it was dealing at arm’s length. The property had a capital cost of $65,000 and a fair market value of $22,000. It was the only property in the class, which had an undepreciated capital cost of $50,000. What is the capital cost of the property for the shareholder?
1)
2)
3)
4)
c.
$22,000
$28,000
$50,000
$65,000
In 2009, Prairie Inc., which was in financial difficulty, reached an agreement with a creditor to pay
$130,000 in settlement of a debt