Ch. 17 - Deferred Income Plans

Question 1

RRSP - overcontribution penalty

Answer 1

• penalty is 1% per month equal to the overcontribution

- allowed $2,000 without penalty

Question 2

RRSP - Spousal contributions

Answer 2

• one can contribute to the spouses RRSP to the extent the contributor has space available

Question 3

RRSP Deduction Limit

- calculation

Answer 3

A + B where:
A = unused limit from PY
B = lesser of:
i) RRSP dollar limit for the year, and
ii) 18% of the taxpayers earned income for PY

Question 4

RRSP - HBP
Criteria
Max withdrawal
Repayment

Answer 4

1. the home will be the resident of the taxpayer
2. The taxpayer cannot have owned a home in the prior 4 years
3. maximum withdrawal is $35K for each spouse
4. repaid over 4 years

Question 5

TFSA - withdrawals impact on space

Answer 5

The space available is increased in the following year by withdrawals made in the current year

Question 6

RESP

• contribution
• withdrawal
• income

Answer 6

• contributions are not deductible
• withdrawals are not taxable
• income is not taxed until withdrawn and is taxed in the hands of the beneficiary