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In the current year, C Inc. had the following expenses: $4,000 legal fee to register a...

In the current year, C Inc. had the following expenses: $4,000 legal fee to register a mortgage on its office building, $7,000 for landscaping the land around the office building and $800 interest paid to CRA for late tax instalments. The legal fee and landscaping expenses were accrued in the current year and paid in the following year. Determine the amount that C’s net income for tax purposes will decrease in the current year due to these expenses.

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Answer #1

The amount that C’s net income for tax purposes will decrease in the current year due to these expenses:

legal fee to register a mortgage on its office building = $4,000

interest paid to CRA for late tax instalments = $800

Total = $4,800  
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