Question 1

Income tax is calculated for which of the following groups of jurisdictions?

Accepted Answer

A) Municipal, provincial, and federal 
B) Provincial, federal, and international 
C) Municipal, federal, and international 
D) Municipal, provincial, and international 
A) Municipal, provincial, and federal 
B) Provincial, federal, and international 
C) Municipal, federal, and international 
D) Municipal, provincial, and international

Question 2

If there is a conflict between an international tax treaty and Canadian tax legislation, the Canadian tax legislation will prevail.

Accepted Answer

A) True 
 B)False

Question 3

Your client, a government employee, would like to reduce his taxes. He is trying to decide whether he should contribute $5,000 to an RRSP this year. He has an RRSP as does his wife, a part time employee at a day care centre.
Briefly describe the basic goals of tax planning. What advice would you give your client regarding his RRSP contribution? Explain your conclusion.

Accepted Answer

The basic goals of tax planning can be s

Question 4

Which of the following factors would NOT be relevant under the Canada/U.S. tax treaty tie-breaker rules for determining the residence of an individual?

Accepted Answer

A) The country in which the individual earns business income. 
B) The country in which the individual is a citizen. 
C) The country in which the individual has a permanent home available to him. 
D) The country in which the individual has a habitual abode. 
A) The country in which the individual earns business income. 
B) The country in which the individual is a citizen. 
C) The country in which the individual has a permanent home available to him. 
D) The country in which the individual has a habitual abode.

Question 5

Ms. Floot has been out of Canada for several years. She is presumed to be a non-resident as long as certain tests are met. Indicate the condition that does NOT have to be met.

Accepted Answer

A) She did not leave a spouse or other dependants in Canada. 
B) She does not return to Canada on a regular or frequent basis. 
C) She did not leave personal property or social ties in Canada. 
D) She did not leave taxable Canadian property in Canada. 
E) She did establish permanent residence in another jurisdiction. 
A) She did not leave a spouse or other dependants in Canada. 
B) She does not return to Canada on a regular or frequent basis. 
C) She did not leave personal property or social ties in Canada. 
D) She did not leave taxable Canadian property in Canada. 
E) She did establish permanent residence in another jurisdiction.

Question 6

Which of the following statements is NOT correct?

Accepted Answer

A) Most major income tax changes are introduced in the annual Federal Budget. 
B) A federal election can prevent passage of draft legislation. 
C) Proposed changes in tax law are usually introduced to parliament in the form of a Notice of Ways and Means Motion. 
D) When there is a conflict between the Canadian Income Tax Act and an international agreement, the terms of the Canadian Income Tax Act prevail. 
A) Most major income tax changes are introduced in the annual Federal Budget. 
B) A federal election can prevent passage of draft legislation. 
C) Proposed changes in tax law are usually introduced to parliament in the form of a Notice of Ways and Means Motion. 
D) When there is a conflict between the Canadian Income Tax Act and an international agreement, the terms of the Canadian Income Tax Act prevail.

Question 7

Under what circumstances will a person who is not resident in Canada be required to pay Canadian income taxes?

Accepted Answer

The circumstances that would result in a

Question 8

With respect to the residency of an individual, which of the following statements is NOT correct?

Accepted Answer

A) To be a resident for tax purposes, an individual must be a Canadian citizen. 
B) If an individual leaves or enters Canada during the current year, he will be considered a part-year resident for tax purposes. 
C) An individual is a Canadian resident for tax purposes if his principal residential ties are in Canada. 
D) An individual is considered to be a Canadian resident for tax purposes if he visits for more than 183 days in a calendar year. 
A) To be a resident for tax purposes, an individual must be a Canadian citizen. 
B) If an individual leaves or enters Canada during the current year, he will be considered a part-year resident for tax purposes. 
C) An individual is a Canadian resident for tax purposes if his principal residential ties are in Canada. 
D) An individual is considered to be a Canadian resident for tax purposes if he visits for more than 183 days in a calendar year.

Question 9

With respect to the structure of the Income Tax Act, which of the following statements is correct?

Accepted Answer

A) The major components of the Income Tax Act are called Divisions. 
B) The Income Tax Act has Parts numbered I through XVII, reflecting the fact that there are 17 Parts in the Act. 
C) All Parts of the Income Tax Act have Divisions. 
D) All Parts of the Income Tax Act contain at least one Section. 
A) The major components of the Income Tax Act are called Divisions. 
B) The Income Tax Act has Parts numbered I through XVII, reflecting the fact that there are 17 Parts in the Act. 
C) All Parts of the Income Tax Act have Divisions. 
D) All Parts of the Income Tax Act contain at least one Section.

Question 10

Which of the following could be required to file a GST return?

Accepted Answer

A) Chan's Clothing Store (an unincorporated business) 
B) The Chan Foundation (a registered charity) 
C) Min Chan (an individual) 
D) All of the above could be required to file a GST return. 
A) Chan's Clothing Store (an unincorporated business) 
B) The Chan Foundation (a registered charity) 
C) Min Chan (an individual) 
D) All of the above could be required to file a GST return.

Question 11

The following two Cases make different assumptions with respect to the amounts of income and deductions that are available to Carl Suzak, a Canadian resident, for the current year.
Case A - Carl had employment income of $126,100, as well as income from an unincorporated business of $14,100. A rental property owned by Carl experienced a net loss of $4,600. Dispositions of capital property during the current year had the following results:   In compliance with the terms of his divorce agreement, Carl paid deductible spousal support of $600 per month for the entire year. In addition to the preceding items, Carl had a winning lottery ticket which resulted in his receiving a prize of $562,000.
Case B - Carl had employment income of $89,000, interest income of $3,100, and net rental income of $8,600. Carl also operated an unincorporated business. Unfortunately, during the current year, it experienced a net loss of $187,400. Dispositions of capital property during the current year had the following results:   Also during the current year, Carl made deductible contributions of $8,600 to his RRSP.
Required: For each Case, calculate Carl's Net Income For Tax Purposes (Division B income). Indicate the amount and type of any loss carry overs that would be available at the end of the current year.

Accepted Answer

Case A
The Case A solution would be calc

Question 12

Mr. John Lenonovitz is an unemployed poet. As Mr. Lenonovitz has no known sources of income, his wife Natasha, a successful painter, has decided to make contributions to an RRSP in his name, rather than making contributions to her own plan. What type of tax planning is involved in this decision? Explain your conclusion.

Accepted Answer

Natasha is involved in income splitting

Question 13

Any taxpayer can choose the calendar year as their taxation year.

Accepted Answer

A) True 
 B)False

Question 14

Indicate three disadvantages of a tax system that uses progressive rates.

Accepted Answer

There are a number of possibilities here

Question 15

Which of the following entities could be required to file an income tax return?
• Sally Forbes (an individual)
• Forbes Boutique (an unincorporated business)
• Forbes and Delaney (a partnership)
• The Forbes family trust (a trust)
• Forbes Enterprises Ltd. (a corporation)
• The Forbes Foundation (an unincorporated charity)

Accepted Answer

Sally Forbes, the Forbes family trust, a

Question 16

Which of the following is an essential factor in determining whether an individual has ceased to be a resident of Canada?

Accepted Answer

A) The individual has closed his Canadian savings account. 
B) The individual has given up his membership in the Canuck Country Club. 
C) The individual has become a resident of another country. 
D) The individual has given up his Ontario driver's licence. 
A) The individual has closed his Canadian savings account. 
B) The individual has given up his membership in the Canuck Country Club. 
C) The individual has become a resident of another country. 
D) The individual has given up his Ontario driver's licence.

Question 17

Which of the following entities could be required to file a GST return?
• Sally Forbes (an individual)
• Forbes Boutique (an unincorporated business)
• Forbes and Delaney (a partnership)
• The Forbes family trust (a trust)
• Forbes Enterprises Ltd. (a corporation)
• The Forbes Foundation (an unincorporated charity)

Accepted Answer

Under the GST legislation, all of the li

Question 18

Mr. Norman Rock transfers some dividend paying shares to his 25 year son who is attending university on a full time basis. What type of tax planning is involved in this transaction? Explain your conclusion.

Accepted Answer

1)I 2)H 3)

Question 19

Which of the following statements with respect to tax reference materials is correct?

Accepted Answer

A) Income Tax Folios are a legislative source of guidance. 
B) Income Tax Regulations are gradually being replaced by Income Tax Folios. 
C) Interpretation Bulletins are gradually being replaced by Information Circulars. 
D) The Income Tax Act is the most important source of information for dealing with matters related to the federal income tax. 
A) Income Tax Folios are a legislative source of guidance. 
B) Income Tax Regulations are gradually being replaced by Income Tax Folios. 
C) Interpretation Bulletins are gradually being replaced by Information Circulars. 
D) The Income Tax Act is the most important source of information for dealing with matters related to the federal income tax.

Question 20

Providing employees with private health care benefits involves what type of tax planning?

Accepted Answer

A) Tax evasion. 
B) Tax deferral. 
C) Income splitting. 
D) Tax avoidance. 
A) Tax evasion. 
B) Tax deferral. 
C) Income splitting. 
D) Tax avoidance.

Income tax is calculated for which of the following groups of jurisdictions?

If there is a conflict between an international tax treaty and Canadian tax legislation, the Canadian tax legislation will prevail.

Which of the following factors would NOT be relevant under the Canada/U.S. tax treaty tie-breaker rules for determining the residence of an individual?

Ms. Floot has been out of Canada for several years. She is presumed to be a non-resident as long as certain tests are met. Indicate the condition that does NOT have to be met.

Which of the following statements is NOT correct?

Under what circumstances will a person who is not resident in Canada be required to pay Canadian income taxes?

With respect to the residency of an individual, which of the following statements is NOT correct?

With respect to the structure of the Income Tax Act, which of the following statements is correct?

Which of the following could be required to file a GST return?

Any taxpayer can choose the calendar year as their taxation year.

Indicate three disadvantages of a tax system that uses progressive rates.

Which of the following is an essential factor in determining whether an individual has ceased to be a resident of Canada?

Mr. Norman Rock transfers some dividend paying shares to his 25 year son who is attending university on a full time basis. What type of tax planning is involved in this transaction? Explain your conclusion.

Which of the following statements with respect to tax reference materials is correct?

Providing employees with private health care benefits involves what type of tax planning?

Procedures and Administration

Income or Loss From an Office or Employment

Taxable Income and Tax Payable for Individuals

Capital Cost Allowance

Income or Loss From a Business

Income From Property

Capital Gains and Capital Losses

Other Income, Other Deductions, and Other Issues

Retirement Savings and Other Special Income Arrangements

Taxable Income and Tax Payable for Individuals Revisited

Taxable Income and Tax Payable for Corporations

Taxation of Corporate Investment Income

Other Issues in Corporate Taxation

Corporate Taxation and Management Decisions

Rollovers Under Section 85

Other Rollovers and Sale of an Incorporated Business

Partnerships

Trusts and Estate Planning

International Issues in Taxation

Gst-Hst

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Exam 1: Introduction to Federal Taxation in Canada

Income tax is calculated for which of the following groups of jurisdictions?

If there is a conflict between an international tax treaty and Canadian tax legislation, the Canadian tax legislation will prevail.

Which of the following factors would NOT be relevant under the Canada/U.S. tax treaty tie-breaker rules for determining the residence of an individual?

Ms. Floot has been out of Canada for several years. She is presumed to be a non-resident as long as certain tests are met. Indicate the condition that does NOT have to be met.

Which of the following statements is NOT correct?

Under what circumstances will a person who is not resident in Canada be required to pay Canadian income taxes?

With respect to the residency of an individual, which of the following statements is NOT correct?

With respect to the structure of the Income Tax Act, which of the following statements is correct?

Which of the following could be required to file a GST return?

Any taxpayer can choose the calendar year as their taxation year.

Indicate three disadvantages of a tax system that uses progressive rates.

Which of the following is an essential factor in determining whether an individual has ceased to be a resident of Canada?

Mr. Norman Rock transfers some dividend paying shares to his 25 year son who is attending university on a full time basis. What type of tax planning is involved in this transaction? Explain your conclusion.

Which of the following statements with respect to tax reference materials is correct?

Providing employees with private health care benefits involves what type of tax planning?

Procedures and Administration

Income or Loss From an Office or Employment

Taxable Income and Tax Payable for Individuals

Capital Cost Allowance

Income or Loss From a Business

Income From Property

Capital Gains and Capital Losses

Other Income, Other Deductions, and Other Issues

Retirement Savings and Other Special Income Arrangements

Taxable Income and Tax Payable for Individuals Revisited

Taxable Income and Tax Payable for Corporations

Taxation of Corporate Investment Income

Other Issues in Corporate Taxation

Corporate Taxation and Management Decisions

Rollovers Under Section 85

Other Rollovers and Sale of an Incorporated Business

Partnerships

Trusts and Estate Planning

International Issues in Taxation

Gst-Hst

Filters