1.Eldrick is 48 years old and has been employed as a gas fitter for 21 years. During this period, there has not been any interruptions to his Canada Pension Plan (CPP) contributions. His wife Rhonda is 45 years old. The couple has two children: Perry, who is 23 years old and enrolled full-time in university and Samantha, who is 18 years old and has just started working full-time at a clothing store. Both children still live at home. Last week,

Eldrick was seriously injured in a gas main explosion. Assuming, Eldrick's injuries are severe and prolonged as per the definition of total disability under the CPP, what statement isFALSE?

a)Eldrick's CPP disability benefits will be calculated based on a flat-rate amountplus75% of the retirement benefit he would have received at age 65.

b)Should Eldrick die later this year, Rhonda would be eligible for a survivor's pension based on a flat-rate amountplus37.5% of Eldrick's retirement pension.

c)As children of a disabled contributor, both Perry and Samantha would be eligible to receive a pension under the CPP.

d)Eldrick's CPP disability benefits will be subject to taxation.

QUESTIONS2 - 3 ARE BASED ON THE FOLLOWING INFORMATION:

2,Gunther and Maria are married. Maria is a cosmetic surgeon who earns $220,000 per year. Gunther is a technician for a cable company and earns $62,000 per year.

Seven years ago, they purchased a house requiring a mortgage of $350,000 amortized over 20 yearsthe current mortgage balance is $219,000. Gunther also has a $75,000 loan registered in his name only that he will repay within five years. Based on their lifestyle, they will likely always have approximately $140,000 in outstanding debt from credit cards and personal lines of credit.

The couple's only insurance coverage belongs to Maria: group coverage of two-and-a-half times her annual salary and a $200,000 individual whole life policy. Gunther is the designated beneficiary under both policies and Maria trusts that he will use the funds in accordance with her wishes. Upon her death, Maria would like to leave her nephew a lump sum of $250,000. Similarly, upon his death, Gunther would like to leave a $50,000 charitable bequest to his church. The couple would like to use insurance to fund both gifts.

Upon the death of either spouse, Gunther and Maria would like their respective insurance coverage to offset all outstanding debts so that the surviving spouse will not be left in financial difficulty. They want insurance that has fixed premiums that over the long-term remain as low as possible.

If the only reasons Maria and Gunther want to buy insurance are for the reasons detailed above, what type of insurance coverage wouldBESTmeet the needs of Maria and Gunther?

a)$200,000 term-100 insurance on Gunther with a $75,000 5-year decreasing term insurance rider and a $225,000 15-year decreasing term insurance rider

b)$500,000 joint-last-to-die, whole life insurance with a $250,000 joint-last-to-die, 15-year decreasing term insurance rider

c)$750,000 adjustable whole life insurance on Maria

d)$575,000 joint-first-to-die, universal life insurance with mortality deductions based on yearly renewable term

3.Maria and Gunther are healthy but, Gunther's family has a history of heart disease and Maria's family has had incidences of cancer. Should they suffer a long-term illness, they want to protect against the erosion of the purchasing power of any insurance benefits they receive. ToFULLYaddress their concerns, what combination of riders should Gunther and Maria consider adding to any life insurance contract they purchase?

a)terminal illness benefit rider and a dread disease rider

b) terminal illness benefit rider, a long-term care rider and a cost of living adjustment (COLA) rider

c)long-term care rider and a COLA rider

d)terminal illness benefit rider, a dread disease rider, a long-term care rider and a COLA rider

4.If Gunther and Maria are also interested in purchasing disability insurance, what option would be made available to them?

a)$18,333 per month own occupation coverage on Maria; $5,166 per month own occupation coverage on Gunther

b)$12,000 per month regular occupation coverage on Maria; $3,750 per month regular occupation coverage on Gunther

c)$12,222 per month own occupation coverage on Maria; $3,444 per month regular occupation coverage on Gunther

d)$15,000 per month own occupation coverage on Maria; $3,000 per month any occupation coverage on Gunther

5.Walter and Beatrice have been married for 36 years. Walter works at an automobile parts manufacturer; Beatrice has not been in the workforce since she got married. In April of next year, Walter will turn 63 years of age. What statement concerning the Canada Pension Plan (CPP) isFALSE?

a)If Walter were to retire on his 63^rdbirthday, his monthly pension will be 88% of the pension he would be entitled to receive had he deferred collecting his CPP benefits until age 65.

b)If Walter and Beatrice were to divorce later this year, it would be mandatory for Walter to split his CPP pension credits with Beatrice based on their 36-year marriage.

c)Assume Walter retires immediately and begins collecting his CPP retirement benefit. If next year he returns to work on a part-time basis and earns $600 per month, even though he has no longersubstantially ceased working, his CPP retirement benefits will nevertheless continue unaffected.

d)If Walter defers retirement and opts to continue working, he will not be required to make CPP contributions beyond age 70.

6.Sophia and Vincenzo are married. In 1984, the couple immigrated to Canada from Italy. At that time Sophia was 32 years old; Vincenzo was 34 years old. Other than annual vacations to Italy, the couple has resided in Canada without interruption. What statement regarding Old Age Security (OAS) benefits is true?

a)Sophia will be ineligible to receive the maximum OAS benefit if she applies at the earliest possible age.

b)Once Sophia begins receiving her OAS benefits, Vincenzo will be eligible for the Allowance as long as he is no longer working.

c)If Sophia and Vincenzo were to move back to Italy when Sophia turns 66 years of age, their OAS pensions will be halted after six months and will not be reinstated until they resume their residency in Canada.

d)For tax purposes, OAS benefits and benefits under GIS and the Allowance (if eligible to receive them) must be included as part of Sophia and Vincenzo's total income but, can subsequently be deducted from their taxable income (effectively making them tax-free).

7.Justin belongs to an integrated defined-benefit pension plan. It provides a benefit of 1.3% of final average earnings up to the year's maximum pensionable earnings (YMPE) in the final year and 2% on final average earnings above the YMPE in the final year for each year of service. If Justin has projected his final average earnings to be $85,000 and the YMPE in the final year to be $55,300, what annual pension benefit will he receive when he retires after 20 years of service?

a)$22,100

b)$26,258

c)$28,120

d)$34,000

8.At the end of last year, Simone had over-contributed $6,000 to her RRSP. Simone's new RRSP contribution room for this year is $5,000. What is theMAXIMUMamount that Simone can contribute to an RRSP this year without incurring an over-contribution penalty?

a)$0

b)$1,000

c)$3,000

d)$7,000

9.Ralf is the annuitant under a non-qualifying RRIF established last year. The fair market value of the plan at the beginning of this year was $260,000. If Ralf is 68 years old, what is theMINIMUMamount he must withdraw from his RRIF before the end of this year?

a)$11,830

b)$13,728

c)$20,090

d)$22,410

10.Bruce received $22,000 in commissions working part-time as a real estate agent; $275 in interest from a Government of Canada bond; $6,000 in taxable capital gains from the sale of his equity mutual funds; $185 in dividends from the preferred shares of a publicly traded U.S. corporation; $1,500 in rent payments each month from a condominium he rents out and $1,200 in interest from a non-registered annuity. How much did Bruce earn in property income?

a)$7,475

b)$19,660

c)$25,660

d)$47,660

11.In April of this year, Oscar received $75,000 in insurance death benefits when his uncle passed away. Oscar immediately donated the entire amount to the Canadian Cancer Society. In June of this year, Oscar died. His net income from employment for this year is $60,000. When filing his tax return, if Oscar's personal representative claims the maximum permissible amount for purposes of the charitable donation tax credit, what is the value of the federaltax credit to Oscar for this year?

a)$13,022

b)$16,285

c)$17,372

d)$21,722

12.In 1996, Passan purchased a cottage for $70,000. Over the years, Passan has lived in the cottage for approximately four weeks each summer but, only on alternate weekends during the balance of the year. He also owned a house in the city before moving into a rented apartment. When he disposed of the house, he designated it as his principal residence from 2004 to 2011 (inclusive). If Passan sells his cottage in 2017 for $365,000, what is theMINIMUMamount on which he must pay tax due to the sale of the property?

a) $46,932

b)$93,864

c)$201,136

d) $295,000

13.This year, Sven opened a golf clinic structured as a sole proprietorship. For the six months the business was in operation, he recorded a net business loss of $37,500. During the winter months, Sven worked as a salaried employee at a health club. His income from the health club for this year was $19,300. Last year, Sven worked full-time at the health club and earned $44,000. What statement is true?

a)For this year, Sven can record ($18,200) as his total income on his personal income tax return (i.e. total income of negative $18,200).

b)Sven can apply to adjust his tax return for last yearand carry back $18,200 in non-capital losses from this year to reduce the employment income he earned from the health club last year.

c)This year, Sven has realized an allowable business investment loss (ABIL).

d)Sven can carryforward a portion of his business loss from this year to reduce his taxable income in a future year. However, his business loss can only be used to offset future taxable capital gains.

14.Kyle's job as a salesman requires him to travel extensively. His compensation is based on a base salary plus commission. He also receives a number of benefits from his employer. In which instance will Kyle have a taxable benefit?

a)Kyle's employer pays $2,800 to maintain his membership in the company's group private health services plan.

b)Kyle uses the frequent flyer points he accumulated while travelling on business to get a free plane ticket for his daughter.

c)Kyle's employer contributes $2,000 to the company's defined contribution pension plan on Kyle's behalf.

d)Kyle personally pays $800 in dues to maintain his membership in a sales association. His employer reimburses this amount to Kyle.