TX Set 6 Other Income

Question 1

What is included in other income?

Answer 1

Retirement funds
Scholarships, bursaries and fellowships
Death benefits (> $10k)
EI benefits
Research grants - net of expenses
Spousal and child support

Question 2

Can pension income be split? Criteria?

Answer 2

Yes, up to 50% of qualified income (if <65 only RPP, if >65 then RPP/RRSP/RRIF/DPSP)

Question 3

Benefits of pension income splitting

Answer 3

If transferee in lesser tax bracket, less tax paid overall
Allows for pension tax credit for transferee
Possible less OAS clawback for transferor

Question 4

How much is the death benefit exemption? How is excess calculated?

Answer 4

10k. The rest is pro-rated between other beneficiaries.

Question 5

Define indirect payments - how are these taxed?

Answer 5

Payments made for the benefit of minimizing tax. Taxed in hands of transferor (whoever made the request). e.g. dad asking work to transfer money to son to pay for schooling.

Question 6

Are scholarships taxable? And research grants?

Answer 6

No. Yes, net of expenses.

Question 7

Are child support payments taxable?

Answer 7

No.

Question 8

Criteria for spousal support to be taxable to transferee and deductible to transferor

Answer 8

• payments are periodic
• payments are for maintenance of recipient
• payments are made while former spouses were living apart
• payments required in written agreement or order of competent tribunal
• recipient has discretionary use of the amount