Tax Elective 2

Question 1

What is the treatment if you are a part-year resident?

Answer 1

Prorated income and tax credits.

Question 2

Where doe a fourth appeal get heard?

Answer 2

Supreme court of Canada

Question 3

Small business deduction is applied to the lesser of:

Answer 3

Taxable Income & Active Business Income & Business Limit

Question 4

What portion of income has the federal tax abatement applied to it?

Answer 4

The amount earned in that province.

Question 5

For children under 18 who is deemed to have control of the shares?

Answer 5

The parent.

Question 6

Corporate Tax Liability if Resident

Answer 6

Worldwide income

Question 7

Can two corps be associated with different fiscal year ends?

Answer 7

Yes- if associated on one common day.

Question 8

What are specified shares?

Answer 8

Full voting rights under all circumstances

Question 9

What happens to R&D on a T2?

Answer 9

Added back

Question 10

What happens to foreign taxes on a T2?

Answer 10

Added back

Question 11

What happens to taxes paid on ta T2?

Answer 11

Added back

Question 12

What happens to pension expense on a T2?

Answer 12

Added back

Question 13

What happens to club dues on a T2?

Answer 13

Added back

Question 14

What happens to asset impairment on a T2?

Answer 14

Added back

Question 15

Landscaping costs are deductible on a T2?

Answer 15

Yes

Question 16

GRR applies to which income?

Answer 16

Full rate taxable income. (No SBD)

Question 17

Is property income active or passive?

Answer 17

Passive

Question 18

What companies does section 85 apply to?

Answer 18

Individual/Corp rollover to New Corp

Question 19

How is section 85 applied?

Answer 19

Election is filed.

Question 20

Section 85 residencty requirement?

Answer 20

Resident

Question 21

What is not allowed in a section 85 rollover?

Answer 21

Real estate portfolios

Question 22

What must be given for section 85 to be valid?

Answer 22

At least 1 share in exchange.

Question 23

Boot is?

Answer 23

Non share consideration.

Question 24

Section 85 - what price can you elect?

Answer 24

Up to FMV or down to Boot

Question 25

How should A/R be treated on rollover?

Answer 25

Use section 22.

Question 26

Superficial losses are in effect for how long?

Answer 26

30 days before or after

Question 27

Superficial losses apply to what?

Answer 27

Shares or other capital properties.

Question 28

Who do superficial losses apply to?

Answer 28

You - your spouse - other affiliated people

Question 29

What is done with superficial losses?

Answer 29

Not claimed.

Question 30

Who/what is affiliated with you?

Answer 30

Spouse - corp of yours our spouse - trusts or funds of yours

Question 31

How is a superficial loss stopped?

Answer 31

Loss is added to the ACB

Question 32

An example of a stop loss rule:

Answer 32

Superficial Losses

Question 33

Are superficial losses applicable to a TFSA?

Answer 33

No - no gain/loss recorded.

Question 34

Why is an accurate PUC necessary?

Answer 34

Can be returned to shareholder tax free.

Question 35

Legal Stated Capital is shown where?

Answer 35

On the balance sheet