Tax Elective 6

Question 1

Calculate corporate federal tax on $100 active income.

Answer 1

$38 - 10abatement - 17sbd equals 11 percent

Question 2

Calculate corporate federal tax on $100 interest income

Answer 2

$38 - 10abatement + 6.67 ART - 26.67refPartI equals 8

Question 3

Calculate corporate federal tax on $100 above sbd and aii

Answer 3

$38 - 10abatement - 13 GRR equals 15 percent

Question 4

Refundable part I tax is on what?

Answer 4

lesser of 26.67 on AII or 26.67 on taxable income above SBD or Part I tax payable

Question 5

Aggregate Investment Income includes what?

Answer 5

Taxable Cap Gains, Interest, Rent, Foreign Dividends, Royalties

Question 6

Calculate corporate federal tax on $100 M&P above SBD

Answer 6

$38 - 10abatement - 13 M&P equals 15 percent

Question 7

Are Canadian dividends included in AII?

Answer 7

No

Question 8

How are Canadian Dividends included in corp income?

Answer 8

Not included - but refundable tax in part IV

Question 9

Refundable part IV tax on connected dividends

Answer 9

% ownership * dividend refund

Question 10

How are foreign dividends included in corp income?

Answer 10

Aggregate INvestment Income

Question 11

Are US Dividends taxed in part 1 or part IV ?

Answer 11

part 1 at 26.67 percent

Question 12

RDTOH = last years balance less last years refund plus:

Answer 12

part 1 refundable tax + part IV refundable tax

Question 13

How would you cleafr your RDTOH balance?

Answer 13

Pay 3 times as much in dividends

Question 14

What goes into the CDA balance?

Answer 14

capital dividens received plus the non taxable portion of net capital gains (and non taxable portion of BIL) plus life insurance proceeds

Question 15

What’s the advantage of SRED?

Answer 15

100% deductible AND get an investment tax credit

Question 16

What is SRED ITC for CCPCs?

Answer 16

35% refundable on eligible expenses up to $3,000,000

Question 17

Personal non resident income is charged on?

Answer 17

Canadian employment, canadian business, and dispositions of Canadian property.

Question 18

The ceiling for a section 85 rollover is always:

Answer 18

FMV

Question 19

The floor for inventory and land on an 85 rollover is:

Answer 19

> of fmv of boot or the lowest tax value

Question 20

85 rollover floor - depreciable

Answer 20

> of fmv of boot or lowest tax value

Question 21

85 rollover floor - CEC

Answer 21

> of fmv of boot or lowest tax value

Question 22

Why use a section 22 for A/R?

Answer 22

Business loss as opposed to capital loss

Question 23

Division A

Answer 23

Who owes tax

Question 24

Division B

Answer 24

Net Income for Tax Purposes

Question 25

Division C

Answer 25

Taxable Income

Question 26

Dividsion E

Answer 26

Taxes payable calculation

Question 27

How much can be taken out of RRSPs for the LLP?

Answer 27

Max of $20,000

Question 28

How much per year can be taken out of RRSPs for the LLP?

Answer 28

Max of $10,000

Question 29

When to RRSPs under the LLP have to be repaid?

Answer 29

After 5 years

Question 30

Employee home office amount can’t include:

Answer 30

You cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.