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Taxation CPA > Unit 3 > Flashcards

Unit 3 Flashcards

1
Q

Bonuses tax inclusion

A

Include when paid

OR when declared but >3 years until they receive

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2
Q

Leased employer vehicle

A

Standby charge = 2/3 x (lease payments - portion made for insuring against loss or damages)

Reduced standby (business is >50%) = ((personal km/(1667x months available)) x regular standby)

Operating cost = 0.33 x personal km

Reduced operating cost, lesser of:
= personal km x 0.33
= 1/2 reduced standby charge

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3
Q

Employer owned vehicle

A

Standby = 2% x full cost x months available
Reduced standby (business is >50%) = ((personal km/(1667x months available)) x regular standby)

Operating cost = 0.33 x personal km

Reduced operating cost, lesser of:
= personal km x 0.33
= 1/2 reduced standby charge

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4
Q

Group insurance premiums for healthcare

A

NOt taxable (deduct)

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5
Q

Group insurance benefit received

A

Taxable

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6
Q

Non-group insurance premium paid by employer

A

Taxable

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7
Q

Non-group benefit received

A

Not taxable (deduct)

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8
Q

Allowances

A

Generally taxable, Travel and vehicle allowances are only taxable is unreasonable

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9
Q

Reimbursement

A

Not taxable unless it is only for personal expenses

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10
Q

Vehicle allowances are not reasonable if

A
  • not based on km
  • employee receives allowance and reimbursement
  • over the CRA limit (0.68 for <5000km)
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11
Q

Auto operating costs does not include:

A

interest, CCA, lease costs, parking

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12
Q

Employee loan not for home purchase

A

= (prescirbed rate for the quarter - interest rate paid) x (#days loan outsanding / 365) x amount of loan outstanding
LESS: any interest paid by taxpayer

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13
Q

Employee loan for home purchase

A

= (lesser of prescirbed rate when came into effect or rate in the quarter - interest rate paid) x (#days loan outsanding / 365) x amount of loan outstanding
LESS: any interest paid by taxpayer
** calculate based on the days in the quarter)

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14
Q

Stock options benefit - IN THE MONEY

A

FV of stock on grant date is GREATER than the exercise price
- CCPC can still claim the deduction if it was held for >2 year

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15
Q

CCPC stock options benefit

A

@ selling date
- TCG
- Stock option benefit
- Stock option deduction

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16
Q

Public company stock options benefit

A

@ exercise date
- Stock option benefit
- Stock option deduction (only if FV at grant was LESS than ex price)

@ selling date
- TCG

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17
Q

Commission earning expense

A
  • Advertising
  • 50% meals
  • transportation
  • operating costs for vehicle
  • lease costs for vehicle
  • parking at clients
  • Home expense :property tax, insurance
  • CCA on vehicle
18
Q

T2200 employee deductions

A
  • Can not claim commission expenses too
  • 50% meals
  • transportation costs
  • Operating costs for vehicle
  • lease costs for vehicle
    -CCA on vehicle
19
Q

Regular employee WFH expenses

A
  • utilities
  • home internet access fees
  • repairs and maintenance
  • rent
  • long distance phone calls (not prorated)

(only commissioned employees are allowed to deduct property taxes and insurance)

20
Q

Lease costs for employee vehicle

A

Lesser of:

= (($950 plus tax x days leased)/30) - agg lease costs in all years - CRA rate on refundable deposits over $1000 - Total reimbursement since inception

OR

= (( Total lease payments x 36,000+GST) / 0.85(100/85)x36000) - CRA rate on refundable - Total reimbursements

21
Q

Spousal support deductible if:

A
  • periodic
  • for maintenance of recipient
  • made while living apart
  • required per written agreement
  • recipient has discretionary use
22
Q

OAS clawback

A

Lesser of:
OAS benefits received in the year

OR:

Net income before pension recovery
Less: Threshold (86,912)
———-
= Excess x 15%

23
Q

Annuities

A

= (Amount paid to acquire the annuity / total payments to be received) x annuity payment per year

24
Q

EI clawback

A

30% the least of:

EI benefits included in income

NI4TP in excess of $76,875

25
Q

Research grants

A

Income that exceeds eligible expenses is taxable

26
Q

Pension income splitting

A

Election to transfer $2000 of pension income to lower income spouse
Tax credit for 15% of transfer

27
Q

OTher amounts in Division C

A
  • social assistance benefits
  • Workers comp
  • Guaranteed income supplement
  • CPP contributions
  • Legal and accounting fees in objection or appeal
28
Q

Moving expense

A
  • must be >40km closer to place of work
    Simplified: $23 per meal, $ 69 per day max

Other:
- transportation, lease cancellation, costs of maintaining former vacant residence, cost of changing address

29
Q

Child care expenses Age maximimums

A

Under 7 = $8,000
Ages 7-16 = $5,000
Disabled = $11,000

30
Q

Child Camp maximums

A

Under 7 years = $200 per week
Regular childeren = $125

31
Q

Childcare deduction for low income earner

A

Lesser of:
1. Actual amount paid + camps
2. Annual limits
3. 2/3 earned income (employment income before deductions - add back RPP, business income)

32
Q

Childcare deduction for high income earner

A

Lesser of
1. Actual amount paid
2. SUm of ($200 x children under 7, $275 x disabled, $125 x other children) x # of weeks the lower income was gone
3. 2/3 high income earner earned income

33
Q

RRSP deduction

A

MAX deduction is the lesser of:

  1. RRSP deduction limit equals:
    Lesser of:
    RRSP dollar limit
    18% PY Earned income
    Less: PY pension adjustment

OR:

  1. Contributions made in the time period
    Undeducted contributions carried forward
    Contributions made from March-Dec
    Cont made from Jan to Mar next year
34
Q

RRSP - earned income

A

Employment income (add back RPP deduction)
Business income
Rental income
Support income
Research ggrants
disability penions
Less:
Business loss
Rental loss
Spousal payments

35
Q

Non-capital loss carry back period

A
  • 3 years back
  • 20 years forward
36
Q

Net-capital loss carry back period

A
  • 3 years back
  • forward indefinitly
37
Q

ABILs

A
  • 3 yrs back
  • 10 yrs forward
  • after 10 yrs, it becomes a Net capital loss
38
Q

Unused lifetime deduction

A

= 485,595
Less: prior deductions (50% CG)

39
Q

Annual gains limit

A

Lesser of:
Net TCG on assets during the year
Net TCG on just QSBC shares during the year

Minus:
Excess NCL in the CY + ABIL in the year (whether or not claimed)

40
Q

Cumulative gains limit

A

= Sum of all AGL (50%)
Less
Sum of all amounts of CGD in PYs
CNIL balance at the end of current year

41
Q

PUP

A

Deemed POD or ACB is greater of actual or $1000
No Loss can be claimed

42
Q

LPP

A

Deemed POD or ACB is greater of actual or $1000
Loss can only be applied against other LPP

Taxation CPA (3 decks)

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