Cga Tx2 Essay

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CGA-CANADA ADVANCED PERSONAL & CORPORATE TAXATION [TX2] EXAMINATION December 2009 Marks Notes: 1. 2. 3. 4. 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. Time: 4 Hours 20 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. Which of the following is not a condition for the application of subsection 84.1(1), concerning the non-arm’s length transfer of shares? 1) 2) 3) 4) The vendor must be an individual residing in Canada. The consideration must consist of shares and notes. The corporation whose shares are transferred must be resident in Canada. The corporation whose shares are transferred and the corporation acquiring them must be connected after the acquisition. b. Piwi Inc. has a fiscal period that ends on February 28. On April 3, 2007, Piwi lent $50,000 to a shareholder. Under subsection 15(2), what is the latest date by which the shareholder must repay the loan if he does not want to include the amount of the loan in his income? 1) 2) 3) 4) c. February 28, 2009 April 3, 2009 February 28, 2010 April 3, 2010 Bar Ltd. is in financial difficulty. Its sole shareholder, Hoa, had invested $200,000 in the form of

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