Taxation Paper 11

A Canadian corporation has $5,000 of share capital and $30,000 of retained earnings and is being wound-up. If the sole shareholder’s ACB for the shares was $15,000 and he had no other income, what total amount would be included in net income for tax purposes during the year of wind-up?

A sole shareholder of a Canadian corporation received during 20X1 cash dividends of $4,000, interest on money borrowed of $2,000 and equipment lease payments of $6,000 before selling his shares at the end of that year to another investor for $20,000 (ACB $10,000). What total amount would be included in net income for tax purposes during 20X1?

Company X had net capital loss ($40,000) and non-capital loss carryovers ($50,000) and unrealized losses on depreciable property ($20,000). All of the outstanding shares of Company X were purchased by a Canadian corporation in a similar business. What losses can be carried over to the new business?

A public corporation earned $300,000 of manufacturing profits and $50,000 of other income. What are the federal taxes owing on these profits?

A CCPC earned $400,000 of manufacturing profits and $75,000 of other income. What are the federal taxes owing on these profits?

Which of the following elements is not used in examining debt and equity capitalization alternatives?

Which of the following statements about corporate capitalization by shareholder debt is correct?

Which of the following statements about corporate capitalization by share capital is incorrect?

Which of the following could not result when depreciable property is transferred to a corporation by a shareholder?

Which of the following properties does not qualify for the election of transferring property to a corporation at tax cost?