Which of the Following Scenarios Is Not an Allowable Tax

question 8

Multiple Choice

Which of the following scenarios is not an allowable tax transaction?

• A)The taxable income of ABC Co., (a Canadian controlled private corporation), is reduced by the amount of dividends received from other taxable Canadian corporations.
• B)An individual's taxable income on their T1 tax return is reduced by the amount of dividends received from a taxable Canadian corporation.
• C)A donation of $5,000 made to a registered charity by XYZ Co.in the year is used to reduce XYZ's $100,000 net income for tax purposes to a taxable income of $95,000.
• D)Small Co., (a Canadian controlled private corporation), has a net income for tax purposes of $125,000 in 2020, an $8,000 non-capital loss from 2019, and $10,000 of taxable dividends received from a Canadian corporation in 2020.The non-capital loss and the dividends can both be deducted from Small Co.'s net income for tax purposes in 2020.

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Definitions:

Adverse Possession

Open and notorious possession of real property over a given length of time that denies ownership in any other claimant.

Statutorily Prescribed

Requirements or procedures determined and mandated by written law.

Easement By Necessity

An easement that is created when it is essential for the reasonable use of a property, typically for access.

Subdivided

Refers to a piece of land or structure that has been divided into smaller parts for sale, lease, or development.