TIF Problem Eleven - Allowable Business Investment Losses MCQ
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Questions and Answers

What is the maximum deduction for qualified small business corporations in 2019?

  • Higher than the maximum deduction for qualified family farm corporations
  • The same as the maximum deduction for qualified family farm corporations
  • There is no maximum deduction for qualified small business corporations
  • Lower than the maximum deduction for qualified family farm corporations (correct)

Which of the following transactions could result in the taxpayer being able to make a lifetime capital gains deduction?

  • An individual sells 25% of the shares of a CCPC that uses 30% of its assets to produce property income
  • An individual sells 100% of the shares of a CCPC that uses 85% of its assets in an active business (correct)
  • A CCPC sells 100% of the shares of another CCPC that uses 100% of its assets in an active business
  • An individual sells 15% of the shares of a CCPC that uses 95% of its assets in an active business

Which statement about the lifetime capital gains deduction is NOT correct?

  • The Cumulative Gains Limit is reduced by any CNIL balance at the end of the year
  • The deduction is available on any disposition of shares or debt of a qualified small business corporation
  • The Annual Gains Limit is reduced by Allowable Business Investment Losses realized during the year
  • The deduction is only available to corporations (correct)

Which of the following is NOT a requirement for a business to qualify as a qualified small business corporation?

<p>The shares must have been owned by a non-related individual in the past 24 months (C)</p> Signup and view all the answers

Under ITA 111.1, which of the following deductions would be deducted last when computing Taxable Income for an individual?

<p>Northern residents deduction (C)</p> Signup and view all the answers

What type of losses can be deducted as Allowable Business Investment Losses?

<p>Losses from disposition of shares or debt in a Canadian controlled public corporation (A)</p> Signup and view all the answers

If Allowable Business Investment Losses are not used in the current year, where are they added?

<p>To the non-capital loss balance (D)</p> Signup and view all the answers

Which statement about Allowable Business Investment Losses is NOT correct?

<p>They can be deducted against any source of income (C)</p> Signup and view all the answers

What is correct regarding the lifetime capital gains deduction?

<p>Net capital loss carryovers should be deducted before using the deduction (B)</p> Signup and view all the answers

What adjustment is made to the annual gains limit for the lifetime capital gains deduction?

<p>It is reduced by the amount of the individual's CNIL (D)</p> Signup and view all the answers
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