PropertyIncome

PropertyIncome - ASSIGNMENT PROBLEMS PROPERTY INCOME...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ASSIGNMENT PROBLEMS PROPERTY INCOME PROBLEM 1 Outline the tax consequences of each of the following: (a) Roy incurred interest on investment loans as follows: $2,500 related to an investment in a corporation which has not yet paid dividends. $575 on a loan taken out to acquire the shares of a U.S. corporation which paid Roy dividends in the year. Interest is deductible if incurred to acquire a property which will generate income [ITA 20(1)(c)(ii)]. It is irrelevant whether the investment generates income in the year the interest is paid, in another year, or if no income is ever generated. Nor is it relevant whether the property is in Canada or another country. If the property was acquired with the intention of generating income, the interest paid to acquire the property is deductible. Therefore, Roy can deduct the interest he incurred to acquire both properties, i.e., $3,075. Note that the dividend tax credit is not available on the U.S. dividend. (b) $150 paid by Rory for investment counselling services. Rory can deduct his investment counselling fees [ITA 20(1)(bb)].
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

PropertyIncome - ASSIGNMENT PROBLEMS PROPERTY INCOME...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online