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Test Item File Problem Listing
Subjects Covered By Test Item File Problems Chapter 1 Introduction Problem 1-1 1-2 1-3 1-4 1-5
Subject Essay questions True or false Multiple choice Exam exercises Key term matching
1-6 1-7 1-8 1-9
Application of qualitative characteristics Net Income For Tax Purposes Net Income For Tax Purposes Net Income For Tax Purposes
Page 1 3 4 10 14 15 16 17 18
Chapter 2 Procedures and Administration 2 -1 2 -2 2 -3 2 -4 2-5 2 -6
Essay questions True or false Multiple choice Exam exercises Key term matching Individual tax instalments
19 20 22 28 32 33
2 -7 2 -8 2-9 2 -10
Individual and corporate tax instalments Individual tax instalments Corporate tax instalments Individual and corporate tax instalments
34 35 36 37
2 -11 2 -12
Individual tax instalments Corporate tax instalments
38 39
Chapter 3 Income Or Loss From An Office Or Employment 3-1 3-2 3-3 3-4 3-5 3-6
Essay questions True or false Multiple choice Exam exercises Key term matching Automobile benefits
41 43 44 51 57 58 (continued)
Test Item File Problem Listingiii
Chapter 3, continued Problem 3-7 3 -8 3 -9 3-10 3-11 3-12
Subject Employee loans Employee stock options Employee stock options Comprehensive employment income Employment income (Extended in Test Item Problem 4-8) Employment income - simple
Page 59 60 61 62 63 64
Chapter 4 Taxable Income And Tax Payable For Individuals 4 -1 4 -2 4 -3 4 -4 4-5
Essay questions True or false Multiple choice Exam exercises Key term matching
65 67 68 73 79
4 -6 4 -7 4-8
Personal tax credits Personal tax credits - 6 cases Tax payable with employment income. (An extension of Test Item Problem 3-11) Comprehensive tax payable with employment income Comprehensive tax payable with employment income
81 82
4-9 4-10
83 85 87
Chapter 5 Capital Cost Allowances And Cumulative Eligible Capital 5 -1 5 -2 5 -3 5 -4 5-5 5 -6 5 -7
Essay questions True or false Multiple choice Exam exercises Key term matching CCA calculations CCA calculations
89 91 92 97 102 103 104
5 -8 5-9 5-10 5-11 5 -12 5 -10 5 -11
CCA, recapture, and terminal losses CCA on rental property CCA and tax planning CCA and tax planning Depreciable asset retirements and CEC sale Cumulative Eligible Capital Cumulative Eligible Capital
105 106 107 108 109 110 111
iv
Test Item File Problem Listing
Chapter 6 Income Or Loss From A Business Problem 6-1 6-2 6-3 6-4 6-5
Subject Essay questions True or false Multiple choice Exam exercises Key term matching
Page 113 115 117 124 130
6-6 6-7 6-8 6-9 6-10
ITA 22 accounts receivable election Home office costs and CCA Simple business income Deductible business expenses - corporation Business income with CCA and CEC - corporation
131 132 133 134 135
6-11 6-12 6-13 6-14 6-15
Business income with CCA and CEC - corporation Business income with CCA - proprietorship Comprehensive business income Comprehensive case (with coverage of preceding chapters) Comprehensive case (with coverage of preceding chapters)
137 138 139 141 143
Chapter 7 Income From Property 7-1 7-2 7-3 7-4 7-5
Essay questions True or false Multiple choice Exam exercises Key term matching
145 146 147 153 158
7-6 7-7 7-8 7-9 7-10
Interest Deductibility Rental income Property income - alternative investments Property income - alternative investments Business vs. property income
159 160 161 162 163
7-11 7-12 7-13
Income trusts and mutual funds Dividend vs. interest income Comprehensive case (with coverage of preceding chapters)
164 165 166
Test Item File Problem Listing
Chapter 8 Capital Gains And Capital Losses Problem 8 -1 8 -2 8 -3 8 -4 8-5
Subject Essay questions True or false Multiple choice Exam exercises Key term matching
Page 169 171 173 180 186
8 -6 8 -7 8 -8 8 -9 8 -10
Identical properties Warranties and bad debts Capital gains reserves Capital gains reserves Principal residence designation
187 188 189 190 191
8-11 8 -12 8 -13 8-14 8-15
Personal use property Capital gains on foreign securities Identification of capital gains Change in use and rental income with CCA Deemed dispositions on departure from Canada
192 193 194 195 196
8 -16 8 -17 8 -18 8 -19 8-20
Deferral on small business shares Voluntary dispositions Involuntary dispositions Involuntary dispositions Comprehensive case (with coverage of preceding chapters)
197 198 199 200 201
Chapter 9 Other Income, Other Deductions, And Income Attribution 9 -1 9 -2 9 -3 9 -4 9-5 9 -6
Essay questions True or false Multiple choice Exam exercises Key term matching Other income and deductions including RESPs
203 205 208 216 222 223
9-7 9-8 9-9 9 -10 9 -11 9 -12
Moving expenses Child care expenses Child care expenses Pension income splitting Non-arm’s length transactions Deemed dispositions at death
224 226 227 228 229 230
(continued)
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vi
Test Item File Problem Listing
Chapter 9, continued Problem 9-13 9-14 9-15 9-16 9-17
Subject Deemed dispositions on death and departure from Canada Income attribution Gifts and income attribution Comprehensive case (with coverage of preceding chapters) Comprehensive case (with coverage of preceding chapters)
Page 231 232 233 234 236
Chapter 10 Retirement Savings 10 -1 10 -2 10 -3 10 -4 10-5
Essay questions True or false Multiple choice Exam exercises Key term matching
239 241 242 248 253
10-6 10 -7 10 -8 10 -9 10-10 10 -11 10-12
Net income with RRSP RRSP contribution calculations RPP and RRSP contribution calculations RRSP contribution calculations Employment income with RRSP RRSP contribution calculations Comprehensive Case (with coverage of preceding chapters)
254 255 256 257 258 259 260
Canadian Tax Principles Problem Concordance (Page 1 of 8 Pages) This Problem Concordance shows the problem number in the 2011/12 edition in regular type and the number of the updated problem in the 2012/13 (New) edition in bold. The number of new essay questions, multiple choice questions (see separate Concordance) and Exam Exercises is shown in the last column.
Chap 1
Chap 2
Chap 3
SS = Self Study
AP = Assignment Prob. TIF = Test Item File
2012/13 SS 1-1 SS 1-2 SS 1-3 SS 1-4 SS 1-5 SS 1-6 SS 1-7
2011/12 SS 1-1 SS 1-2 SS 1-3 SS 1-4 SS 1-5 SS 1-6 AP 1-8
2012/13 AP 1-1 AP 1-2 AP 1-3 AP 1-4 AP 1-5 AP 1-6 AP 1-7 AP 1-8
2011/12 AP 1-1 AP 1-2 AP 1-3 AP 1-4 AP 1-5 AP 1-6 AP 1-7 New
2012/13 SS 2-1 SS 2-2 SS 2-3 SS 2-4 SS 2-5 SS 2-6
2011/12 SS 2-1 SS 2-2 SS 2-3 TIF 2-10 SS 2-4 SS 2-5
2012/13 AP 2-1 AP 2-2 AP 2-3 AP 2-4 AP 2-5 AP 2-6 AP 2-7
2011/12 AP 2-1 AP 2-2 New New AP 2-5 AP 2-6 AP 2-7
2012/13 SS 3-1 SS 3-2 SS 3-3 SS 3-4 SS 3-5 SS 3-6 SS 3-7 SS 3-8 SS 3-9 SS 3-10
2011/12 SS 3-1 SS 3-2 SS 3-3 SS 3-4 SS 3-5 SS 3-6 SS 3-7 SS 3-8 TIF 3-11 SS 3-9
2012/13 AP 3-1 AP 3-2 AP 3-3 AP 3-4 AP 3-5 AP 3-6 AP 3-7 AP 3-8 AP 3-9 AP 3-10 AP 3-11 AP 3-12 AP 3-13
2011/12 AP 3-1 AP 3-2 AP 3-3 AP 3-4 AP 3-5 AP 3-6 AP 3-7 New AP 3-8 AP 3-10 AP 3-11 AP 3-12 TIF 3-13
2012/13 TIF 1-1 TIF 1-2 TIF 1-3 TIF 1-4 TIF 1-5 TIF 1-6 TIF 1-7 TIF 1-8 TIF 1-9 2012/13 TIF 2-1 TIF 2-2 TIF 2-3 TIF 2-4 TIF 2-5 TIF 2-6 TIF 2-7 TIF 2-8 TIF 2-9 TIF 2-10 TIF 2-11 TIF 2-12 2012/13 TIF 3-1 TIF 3-2 TIF 3-3 TIF 3-4 TIF 3-5 TIF 3-6 TIF 3-7 TIF 3-8 TIF 3-9 TIF 3-10 TIF 3-11 TIF 3-12
2011/12 TIF 1-1 TIF 1-2 TIF 1-3 TIF 1-4 TIF 1-5 TIF 1-6 TIF 1-7 TIF 1-8 TIF 1-9 2011/12 TIF 2-1 TIF 2-2 TIF 2-3 TIF 2-4 TIF 2-5 TIF 2-6 TIF 2-7 TIF 2-8 TIF 2-9 TIF 2-11 AP 2-3 AP 2-4 2011/12 TIF 3-1 TIF 3-2 TIF 3-3 TIF 3-4 TIF 3-5 TIF 3-6 TIF 3-7 TIF 3-8 TIF 3-9 TIF 3-10 TIF 3-12 AP 3-9
New Questions New Essay Q = 8 New MC = 13 New Exam Exer = 7
New Questions New Essay Q = 5 New MC = 11 New Exam Exer = 7
New Questions New Essay Q = 6 New MC = 7 New Exam Exer = 10
Canadian Tax Principles Problem Concordance (Page 2 of 8 Pages) The number of new essay questions, multiple choice questions (see separate Concordance) and Exam Exercises is shown in the last column.
SS = Self Study Chap 4
Chap 5
Chap 6
AP = Assignment Prob. TIF = Test Item File
2012/13 2011/12 2012/13 SS 4-1 AP 4-2 AP 4-1 SS 4-2 SS 4-2 AP 4-2 SS 4-3 SS 4-1 AP 4-3 SS 4-4 SS 4-3 AP 4-4 SS 4-5 SS 4-4 AP 4-5 SS 4-6 SS 4-5 AP 4-6 SS 4-7 AP 4-6 TS AP 4-1 TS SS Cha TS SS Cha TS AP 4-2 TS AP 4-3
2011/12 AP 4-1 New AP 4-3 AP 4-4 New AP 4-5 TS AP 4-1 TS AP 4-2 TS AP 4-3
2012/13 SS 5-1 SS 5-2 SS 5-3 SS 5-4 SS 5-5 SS 5-6 SS 5-7
2011/12 SS 5-1 SS 5-2 SS 5-3 SS 5-4 SS 5-5 SS 5-6 AP 5-6
2012/13 AP 5-1 AP 5-2 AP 5-3 AP 5-4 AP 5-5 AP 5-6 AP 5-7 AP 5-8
2011/12 AP 5-1 AP 5-2 AP 5-3 AP 5-4 New AP 5-5 New AP 5-7
2012/13 SS 6-1 SS 6-2 SS 6-3 SS 6-4 SS 6-5 SS 6-6 SS 6-7 SS 6-8 SS 6-9 SS 6-10 SS 6-11 SS 6-12 SS 6-13 SS 6-14
2011/12 SS 6-1 AP 6-1 SS 6-2 SS 6-4 SS 6-3 SS 6-5 SS 6-6 SS 6-8 SS 6-7 SS 6-9 AP 6-9 SS 6-11 SS 6-10 SS 6-12
2012/13 AP 6-1 AP 6-2 AP 6-3 AP 6-4 AP 6-5 AP 6-6 AP 6-7 AP 6-8 AP 6-9 AP 6-10 AP 6-11 AP 6-12 AP 6-13
2011/12 New AP 6-2 AP 6-3 AP 6-4 AP 6-5 AP 6-6 AP 6-7 AP 6-8 New AP 6-10 AP 6-11 AP 6-13 New
2012/13 TIF 4-1 TIF 4-2 TIF 4-3 TIF 4-4 TIF 4-5 TIF 4-6 TIF 4-7 TIF 4-8 TIF 4-9 TIF 4-10 2012/13 TIF 5-1 TIF 5-2 TIF 5-3 TIF 5-4 TIF 5-5 TIF 5-6 TIF 5-7 TIF 5-8 TIF 5-9 TIF 5-10 TIF 5-11 TIF 5-12 TIF 5-13 TIF 5-14 2012/13 TIF 6-1 TIF 6-2 TIF 6-3 TIF 6-4 TIF 6-5 TIF 6-6 TIF 6-7 TIF 6-8 TIF 6-9 TIF 6-10 TIF 6-11 TIF 6-12 TIF 6-13 TIF 6-14 TIF 6-15
2011/12 TIF 4-1 TIF 4-2 TIF 4-3 TIF 4-4 TIF 4-5 TIF 4-6 TIF 4-9 TIF 4-7 TIF 4-8 TIF 4-10 2011/12 TIF 5-1 TIF 5-2 TIF 5-3 TIF 5-4 TIF 5-5 TIF 5-6 TIF 5-14 TIF 5-8 TIF 5-12 TIF 5-7 TIF 5-13 TIF 5-9 TIF 5-10 TIF 5-11 2011/12 TIF 6-1 TIF 6-2 TIF 6-3 TIF 6-4 TIF 6-5 TIF 6-6 TIF 6-7 TIF 6-8 TIF 6-9 TIF 6-10 TIF 6-11 TIF 6-12 TIF 6-13 TIF 6-14 AP 6-12
New Questions New Essay Q = 10 New MC = 17 New Exam Exer = 15
New Questions New Essay Q = 9 New MC = 20 New Exam Exer = 11
New Questions New Essay Q = 10 New MC = 14 New Exam Exer = 14
Canadian Tax Principles Problem Concordance (Page 3 of 8 Pages) The number of new essay questions, multiple choice questions (see separate Concordance) and Exam Exercises is shown in the last column.
Chap 7
Chap 8
SS = Self Study
AP = Assignment Prob. TIF = Test Item File
2012/13 SS 7-1 SS 7-2 SS 7-3 SS 7-4 SS 7-5 SS 7-6 SS 7-7 SS 7-8
2011/12 AP 7-1 SS 7-1 SS 7-2 SS 7-3 SS 7-4 SS 7-5 SS 7-6 AP 7-7
2012/13 AP 7-1 AP 7-2 AP 7-3 AP 7-4 AP 7-5 AP 7-6 AP 7-7 AP 7-8
2011/12 New AP 7-2 AP 7-3 AP 7-4 AP 7-5 AP 7-6 AP 7-8 New
2012/13 SS 8-1 SS 8-2 SS 8-3 SS 8-4 SS 8-5 SS 8-6 SS 8-7 SS 8-8 SS 8-9 SS 8-10 SS 8-11 SS 8-12 SS 8-13 SS 8-14
2011/12 SS 8-1 SS 8-2 SS 8-3 SS 8-4 SS 8-12 AP 8-15 SS 8-9 SS 8-10 New SS 8-8 SS 8-6 SS 8-7 SS 8-13 AP 8-16
2012/13 AP 8-1 AP 8-2 AP 8-3 AP 8-4 AP 8-5 AP 8-6 AP 8-7 AP 8-8 AP 8-9 AP 8-10 AP 8-11 AP 8-12 AP 8-13 AP 8-14 AP 8-15
2011/12 AP 8-1 New AP 8-3 AP 8-4 AP 8-5 AP 8-13 AP 8-14 New AP 8-10 AP 8-11 AP 8-7 AP 8-8 New AP 8-17 New
2012/13 TIF 7-1 TIF 7-2 TIF 7-3 TIF 7-4 TIF 7-5 TIF 7-6 TIF 7-7 TIF 7-8 TIF 7-9 TIF 7-10 TIF 7-11 TIF 7-12 TIF 7-13 2012/13 TIF 8-1 TIF 8-2 TIF 8-3 TIF 8-4 TIF 8-5 TIF 8-6 TIF 8-7 TIF 8-8 TIF 8-9 TIF 8-10 TIF 8-11 TIF 8-12 TIF 8-13 TIF 8-14 TIF 8-15 TIF 8-16 TIF 8-17 TIF 8-18 TIF 8-19 TIF 8-20
2011/12 TIF 7-1 TIF 7-2 TIF 7-3 TIF 7-4 TIF 7-5 New TIF 7-6 TIF 7-7 TIF 7-8 TIF 7-9 TIF 7-10 TIF 7-11 TIF 7-12 2011/12 TIF 8-1 TIF 8-2 TIF 8-3 TIF 8-4 TIF 8-5 TIF 8-6 AP 8-2 TIF 8-7 TIF 8-18 TIF 8-14 TIF 8-15 TIF 8-16 TIF 8-17 TIF 8-11 TIF 8-12 AP 8-9 TIF 8-19 TIF 8-9 TIF 8-10 TIF 8-11
New Questions New Essay Q = 7 New MC = 20 New Exam Exer = 11
New Questions New Essay Q = 7 New MC = 15 New Exam Exer = 12
For Instructors Using Previous Editions For those instructors who have used the previous 2011/12 edition of Canadian Tax Principles, we have described below the reorganization of the Chapter 8 topics for the 2012/13 edition. The main objective was to organize the Chapter 8 topics so that they increased in difficulty as students moved through the chapter. Two topics have been moved to Chapter 9. We felt that non-arm’s length transfers of property and deemed dispositions at death were a better fit with existing Chapter 9 topics such as income attribution. Economic Background - No change in position in Chapter 8. General Rules - No change in position in Chapter 8. Detailed Application Of The Rules - No change in position in Chapter 8. Non-Arm’s Length Transfers Of Property - Moved to CHAPTER 9 beginning Paragraph 9-145. • Inadequate Considerations - ITA 69 • Inter Vivos Transfers To A Spouse - ITA 73(1) And 73(1.01) • Non-Arm’s Length Transfers Of Depreciable Assets - ITA 13(7)(e) • Inter Vivos Farm Or Fishing Property To A Child - ITA 73(3) And 73(4) Deferral Provisions On Replacement Property - Moved to end of Chapter 8 beginning Paragraph 8-136. • Voluntary And Involuntary Dispositions • Timing Considerations • Application Of ITA 44(1) To Capital Gains • Application Of ITA 13(4) To Recapture Of CCA • Combined Application Of ITA 13(4) And 44(1) Deferral Provisions On Small Business Investments - Moved back in Chapter 8 beginning Paragraph 8-133. Deemed Dispositions Except On Death - Moved forward in Chapter 8 beginning Paragraph 8-109. • Change In Use • Departures From Canada Death Of A Taxpayer (Deemed Dispositions) - Moved to CHAPTER 9 beginning Paragraph 9-145. Provisions For Special Assets - Moved forward in Chapter 8 beginning Paragraph 8-70. • Principal Residence • Personal Use Property • Listed Personal Property • Gains And Losses On Foreign Currency • Options
Canadian Tax Principles Problem Concordance (Page 4 of 8 Pages) The number of new essay questions, multiple choice questions (see separate Concordance) and Exam Exercises is shown in the last column.
SS = Self Study
AP = Assignment Prob. TIF = Test Item File
2012/13 SS 9-1 SS 9-2 SS 9-3 SS 9-4 SS 9-5 SS 9-6 SS 9-7 SS 9-8 SS 9-9 SS 9-10
2011/12 SS 9-1 SS 9-2 SS 9-3 SS 9-4 SS 8-5 SS 8-11 SS 9-5 SS 9-6 SS 9-7 SS 9-8
2012/13 AP 9-1 AP 9-2 AP 9-3 AP 9-4 AP 9-5 AP 9-6 AP 9-7 AP 9-8 AP 9-9 AP 9-10 AP 9-11 AP 9-12 AP 9-13
2011/12 AP 9-1 AP 9-3 AP 9-4 AP 9-5 AP 9-2 AP 8-6 New AP 8-12 AP 9-6 AP 9-7 AP 9-8 AP 9-10 New
Chap 10 2012/13 SS 10-1 SS 10-2 SS 10-3 SS 10-4 SS 10-5 SS 10-6 SS 10-7 SS 10-8
2011/12 SS 10-1 SS 10-2 SS 10-3 SS 10-4 SS 10-5 SS 10-6 SS 10-7 AP 10-8
2012/13 AP 10-1 AP 10-2 AP 10-3 AP 10-4 AP 10-5 AP 10-6 AP 10-7 AP 10-8 AP 10-9
2011/12 AP 10-1 AP 10-2 AP 10-3 AP 10-4 AP 10-5 AP 10-6 AP 10-7 AP 10-9 New
Chap 9
2012/13 TIF 9-1 TIF 9-2 TIF 9-3 TIF 9-4 TIF 9-5 TIF 9-6 TIF 9-7 TIF 9-8 TIF 9-9 TIF 9-10 TIF 9-11 TIF 9-12 TIF 9-13 TIF 9-14 TIF 9-15 TIF 9-16 TIF 9-17 2012/13 TIF 10-1 TIF 10-2 TIF 10-3 TIF 10-4 TIF 10-5 TIF 10-6 TIF 10-7 TIF 10-8 TIF 10-9 TIF 10-10 TIF 10-11 TIF 10-12
2011/12 TIF 9-1 TIF 9-2 TIF 9-3 TIF 9-4 TIF 9-5 TIF 9-6 TIF 9-7 TIF 9-8 TIF 9-12 TIF 9-9 TIF 8-8 TIF 8-13 TIF 8-20 TIF 9-10 TIF 9-11 TIF 9-13 AP 9-9 2011/12 TIF 10-1 TIF 10-2 TIF 10-3 TIF 10-4 TIF 10-5 TIF 10-6 TIF 10-7 TIF 10-8 TIF 10-9 TIF 10-10 TIF 10-11 TIF 10-12
New Questions New Essay Q = 8 New MC = 17 New Exam Exer = 13
New Questions New Essay Q = 14 New MC = 11 New Exam Exer = 11
TIF Problem One - 1 Introduction - Essay Questions
Chapter One Test Item File Problems TIF PROBLEM ONE - 1 Introduction - Essay Questions 1.
The major source of federal revenues is the personal income tax. Indicate three other types of taxes that contribute to federal revenues.
2.
What is the meaning of "person" when the term is used in the Income Tax Act?
3.
Briefly describe the procedures used in calculating provincial income taxes for individuals in provinces other than Quebec.
4.
The Canadian income tax system is often used to achieve various economic objectives. Give three examples that illustrate this point.
5.
Provide an example of how taxation policy can be used to influence resource allocation.
6.
The government pays a "child tax benefit" to the parents of children who are under 18 years of age. The payments are reduced by a percentage of income in excess of a specified level. What objectives are achieved by this benefit system?
7.
Indicate three disadvantages of a tax system that uses progressive rates.
8.
A regressive tax is one that taxes high income individuals at lower effective rates. Explain why a sales tax levied at a flat rate of 8 percent can be regressive.
9.
Distinguish between horizontal equity and vertical equity as these terms are used in de-scribing tax systems.
10. What are some of the factors that have led to the entrenched use of tax expenditures as op-posed to program spending? 11. While the Sections of the Income Tax Act are numbered 1 through 260, there are actually more than 260 Sections. Explain why this is the case. 12. What purposes are served by Canada's international tax treaties? 13. List four non-legislative sources of income tax information. 14. What is the meaning of "taxation year" as the phrase is used in the Income Tax Act? 15. Under what circumstances will a person who is not resident in Canada be required to pay Canadian income taxes? 16. What are the components of Net Income For Tax Purposes? 17. ITA 3(b) states that a taxpayer should “determine the amount, if any”, by which taxable capital gains exceeds allowable capital losses. In this context, what is the meaning of the phrase “the amount, if any”? 18. What is the difference between tax avoidance and tax deferral? 19. What is income splitting? Under what circumstances will it provide tax benefits to an indi-vidual?
Canadian Tax Principles 2012/2013 - Test Item File Problems
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TIF Problem One - 1 Introduction - Essay Questions 20. Contributions to a Registered Retirement Savings Plan can be deducted to reduce the taxes of an individual in the year that they are made. However, these contributions will be subject to tax when they are withdrawn from the plan. What type of tax planning is in-volved in this arrangement?
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Canadian Tax Principles 2012/2013 - Test Item File Problems
TIF Problem One - 2 Introduction - True Or False
TIF PROBLEM ONE - 2 Introduction - True Or False 1.
A value added tax is a tax levied on the increase in value of a commodity or service that has been created by the taxpayer’s stage of the production or distribution cycle. True or False?
2. A partnership can be a taxable entity for income tax purposes. True or False? 3. A partnership can be a taxable entity for GST purposes. True or False? 4.
In general, provincial income taxes are based on a specified percentage of federal tax pay-able. True or False?
5.
The federal government does not collect personal or corporate taxes for Ontario or Que-bec. True or False?
6. A sales tax is a regressive tax even when it is applied at a single rate on all transactions. True or False? 7. A major advantage of progressive tax rates is that their use encourages economic growth. True or False? 8. Tax expenditures are less costly to administer than direct funding programs. True or False? 9. Part I of the Income Tax Act is the largest and most important part. True or False? 10. The citation ITA 61(4)(b)(ii) would be read Paragraph 61, Subparagraph 4, Section b, Sub-section ii. True or False? 11. An income tax is payable for each taxation year on the Taxable Income of every person resident in Canada at any time in the year. True or False? 12. Any taxpayer can choose the calendar year as their taxation year. True or False?
Canadian Tax Principles 2012/2013 - Test Item File Problems
3
TIF Problem One - 3 Introduction - Multiple Choice
TIF PROBLEM ONE - 3 Introduction - Multiple Choice Canadian Tax System 1.
Which of the following is not a taxable entity for Canadian income tax purposes? A. B. C. D.
2.
Which of the following could be required to file a GST return? A. B. C. D.
3.
Chan’s Clothing Store (an unincorporated business) The Chan Foundation (a registered charity) Min Chan (an individual) All of the above could be required to file a GST return.
Which of the following forms of taxation provides the largest component of federal gov-ernment taxation revenues: A. B. C. D.
4.
Darklyn Ltd., a Canadian resident corporation. Ms. Sarah Bright, a Canadian resident. Walters and Walters, a group of CMAs operating as a partnership. The Martin family trust.
Personal income tax Corporate income tax Goods and services tax Employment insurance premiums
With respect to provincial income taxes, other than those assessed in Quebec, which of the following statements is not correct? A. Each province can apply different rates to as many brackets for individuals as it wishes. B. The federal government collects the provincial income tax for individuals for every province except Quebec. C. Each province can establish its own tax credits to apply against Tax Payable for indi-viduals. D. Each province can establish rules for determining the Taxable Income of individuals.
Tax Policy Concepts 5.
Which of the following goals is not a current economic policy objective of the Canadian tax system? A. B. C. D.
6.
Ensure the continued provision of public goods Redistribute income and wealth among taxpayers Ensure fairness in the allocation of resources to different levels of government. Economic stabilization such as stimulating the economy or creating jobs.
Which of the following can be considered an advantage of an income tax system based on progressive rates? A. A progressive rate system is simpler to administer. B. A progressive rate system provides greater stability in the context of changing eco-nomic conditions. C. A progressive system discourages tax evasion. D. A progressive system encourages greater effort on the part of individuals.
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Canadian Tax Principles 2012/2013 - Test Item File Problems