Chapter 24 Canadian Taxation KT Flashcards
A type of registered pension plan, also known as a money purchase plan, where the amount contributed is known but the dollar amount of the pension to be received is unknown.
defined contribution plan
A tax deferral vehicle available to RRSP holders. The plan holder must withdraw a certain minimum amount each year which becomes taxable income.
registered retirement income fund
A type of registered pension plan in which the annual payout is a specific dollar amount based on a formula.
defined benefit plan
A matching grant that is an incentive program for those investing in a registered education savings plan (RESP).
Canada Education Savings Grant
A type of government sponsored savings plan used to finance a child’s post-secondary education.
registered education savings plan
A tax planning strategy whereby the higher-earning spouse transfers income to the lower-earning spouse to reduce taxable income.
income splitting
A trust registered with Canada Revenue Agency and established by an employer to provide pension benefits for employees when they retire.
registered pension plan
The tax rate that would have to be paid on any additional dollar of taxable income earned.
marginal tax rate
The type of loss that occurs when an investment is sold and then repurchased any time in a period that is 30 days before or after the sale.
superficial losses
The amount of contributions made to an employer-sponsored retirement plan for a calendar year that affects the amount that may be contributed to an RRSP.
pension adjustment
Deductible expenses, for tax purposes, relating to investments.
carrying charges
A type of contract sold by life insurance companies that pays a regular stream of income to the beneficiary or annuitant at an agreed-upon start date in the future.
deferred annuity
A savings vehicle whereby income earned within an account, from contributions made within specified limits, will not be taxed in any way throughout an individual’s lifetime.
tax-free savings account
An investment vehicle for individuals to defer tax on money to be used for retirement. Income tax on contributions and earnings within the plan is deferred until the money is withdrawn.
registered retirement savings plan
A Canada Revenue Agency rule stating that an investor cannot avoid paying taxes at their marginal rate by transferring assets to other family members who have lower personal tax rates.
attribution rules
