Question

Course- Introduction to taxation

1. Political contributions are allowable business expenses when they result in the awarding of business contracts from the politician or political party.

True or False

2. An employee drove an automobile 7,000 kilometres for work and was paid a reasonable allowance. What would be the maximum allowance the employer could deduct in their 2019 taxation year?

Multiple Choice

• $4,060

• $3,940

• $3,640

• $3,760

3. An "adventure or concern in the nature of trade" occurs when a taxpayer acquires property, such as a used car, with the primary intension to resell at a profit.

True or False

4. If a restaurant owner paid their child $50 per hour to clear tables in the restaurant, the expense could be denied by which of the following tests?

Multiple Choice

• Income-Earning Purpose

• Capital

• Personal Expense

• Reasonableness

Answer 1

Answer 1. False ,
Political party contributions are not tax deductible , irrespective of result in the awarding of business contracts from the politician or political party.

Answer 2 : $ 3940
( Explanation For year 2019 : 58 Cents is Per kilometre rate for the first 5,000 kilometres , and there after , 52 Cents Per kilometre rate after thefirst 5,000 kilometres )

Answer 3 : True.


Answer 4 :  Reasonableness
The test of reasonableness is prima facie test for any business expenditure to be allowed .