Final Study Flashcards
Compare Dividends vs. Interest income
BOND: interest rate * amount - (tax from interest income) = after tax interest income
DIVIDEND: yield * amount + gross-up = taxable dividend - tax payable = owed tax - DTC (federal 6/11 + provincial)*amount = tax payable or saved + yield amount
formula for RRSP contribution room
Unused deduction room + annual addition: lesser of 2018 $ limit (26230$) or 18% of 2017 earned income - PA of 2017
Earned income for RRSP
Salary + taxable benefits - union dues and RPP = net employment income (+/-) business income (+/-) rental income + spousal support = earned income
Day camps
Not include all cost only the allowable period cost of (125/200/275) per week.
Child Care Expenses
The parent with the least income should claim unless he is a full time student or hospitalized. The amount of child expenses is the least of :
- actual amount
- 2/3 of earned income
- annual expense limit: 11K/8K (<7y)/5K
- Periodic expense limit (2.5% of annual)
Moving expenses
NO house hunting
NO old house home costs
NO old town housing and food
MAX 15 days of lodging and food in new town with provincial flat rates for meals
5 LPP
coins, stamps, art, rare books, jewelry
Principle residence exemption
You start by calculating the capital gain per year of ownership. The one that has the highest should get 100% exemption while the other one only partial:
years it was primary +1 *capital gain / total years
Capital gains reserve
when not the full amount of capital gain is paid right away. can carry forward up to 5 years
calculation capital gains reserve
reserve is the lesser of:
capital gain * receivable/POD OR
capital gain * 1*(4-#preceding)/5
THEN: total capital gains - reserve = 50% of that is capital gain
Non-arms length transfer of property
the transferor must recognize the transfer takes place at fair market value
stock dividend
10% of the # shares currently are given @ the price per dividend mentioned
Capital gains
POD - ACB *50%
shares gifted to spouse
shares transferred @ original price paid and NO capital gain is registered
shares gifted to minor child
deemed disposition @ fair market value, taxable capital gain @ the time of transfer
Additional caregiver amount
total 6986 if individual income is below 16405 including spousal credit:
if NO spousal credit: caregiver is 6986
if spousal credit is between 0 < x < 6986, caregiver is 6986 - spousal
if spousal is > 6986 then NO caregiver
Social repayment benefit for OAS when NI>75910
the lesser of 7000 and 15%(NI-75910)
Pension benefit
Eligible to get up to 2000 when they get RRIF up to the amount of RRIF they got
Age credit
7333 - 15% (NI-36976)
What credits can trasnfer to spouse
Age pension disability caregiver spousal
ABILs
Allowable Business Investment Losses, where you can deduct against any type of income for 10 years & carry back for 3 years then unlimited for capital gains
Supply Categories GST
1) fully taxable
2) zero rated
3) exempt supplies
Fully taxable
the consumers pay taxes and the company pays taxes to its suppliers
zero rated
the consumer do not pay but the company pays to its suppliers
