1.Identify the correct answer (a) or (b) for this description: Trust agreement outlines duties and responsibilities in detail, and Trustee has no authority or discretion to alter decisions.

a) Discretionary Trust

b) Non- Discretionary Trust

2.Probate fees are charged when the settler dies but not when the beneficiary dies if the assets are still in the trust.

a) TRUE

b) FALSE

3.The three certainties required to establish a trust are, certainty of interest, certainty of contents and certainty of objects.

a) TRUE

b) FALSE

4.Both the spendthrift trust and the voluntary trust are similar in function and direction to beneficiaries regarding disbursement.

a) TRUE

b) FALSE

5.A beneficiary is someone who benefits from a trust. An income beneficiary, despite the title, is generally eligible to receive both income and capital disbursements from the trust.

a) TRUE

b) FALSE

6.The federal government encourages donations to charities by providing tax credits that are deducted from federal taxes payable. However, even if a taxpayer is in the highest federal tax bracket the first $200 of donation receives a federal credit of only 15%.

a) TRUE

b) FALSE

7.There is also a ceiling regarding the eligible maximum donation that a taxpayer may claim in a taxation year; which is 75% of net income reported, except in the year of death when it is 100% of net income.

a) TRUE

b) FALSE

8.The calculation of the federal credit for a general charitable donation involves the use of two tax rates the higher of the two being 29%. A donation of $678 will allow a federal tax credit of $186.62.

a) TRUE

b) FALSE

9.Regarding the gift of Canadian Cultural Property, the value of the tax receipt is the FMV of the gift. There is no capital gain resulting from the gift but a taxpayer can deduct capital losses on the property within the usual limits.

a) TRUE

b) FALSE

10.Ecological gifts are gifts of land that have been designated by the Minister of the Environment as being ecologically sensitive and deserving of conservation and protection. The tax credit for such charitable contributions is limited to 75% of income.

a) TRUE

b) FALSE

11.If non-resident aliens rent out their American home while they return to Canada, the American Internal Revenue Service requires that 30% of gross rents be withheld and remitted to the IRS.

a) TRUE

b) FALSE

12.For Canadians, all assets normally located in the U.S. are part of a U.S. taxable estate, with some exceptions. This includes American real estate as well as shares in American companies even if held in a Canadian brokerage account including RRSPs and TFSAs.

a) TRUE

b) FALSE

13.The FP Code of Ethics represents the moral mandate by which FP assesses the conduct of CFP professionals and FP Level 1 certificates. The Code reflects the standards of ethical conduct that CFP professionals must demand of themselves and their peers.

a) TRUE

b) FALSE

14.The Code of Ethics represents the commitment of the CFP professional to the public, the industry, the profession and all levels of government.

a) TRUE

b) FALSE

15.The FP Rules of Conduct represent the rules that accompany the Code of Ethics and provide specific guidance to CFP professionals and FP Level 1 certificants on expected practices. The Rules reflect the specific standards of conduct that CFP professionals must demand of themselves and of their peers.

a) TRUE

b) FALSE

16.The FP Financial Planning Practice Standards (the Practice Standards) provide guidance to CFP professionals and FP Level 1 registrants when engaged in financial planning activities with clients.

a) TRUE

b) FALSE

17.At what rate is an inter-vivos trust taxed?

a) A 50% fixed tax rate.

b) A flat tax rate equal to the highest personal income tax rate.

c) A flat tax rate equal to the lowest personal income tax rate.

d) The same tax rates as those used for personal income tax.

18.Betty is the sole beneficiary of a testamentary trust established by her uncle Henry. With regards to the transfer of assets into and out of the trust, which of the following statements is/are true?

1 Property transferred into the trust by Henry's estate is deemed to have been acquired by the trust at the estate's ACB at the time of the transfer.

2 Property may be transferred from the trust to Betty at the trust's ACB

3 The trust can elect to pay the capital gain at the time assets are transferred from the trust to Betty, whereby Betty's ACB for the assets is established as the FMV at the time of the transfer.

4 There will always be double taxation when assets transfer between the trust and Betty, but Betty can reclaim the excess tax when she disposes of the capital property.

a) 1 and 3 only

b) 1, 2 and 3 only

c) 2 only

d) 2, 3 and 4 only

19.Wilson is the settlor of a discretionary trust into which he settled $500,000. Income and capital beneficiaries of the trust include Wilson and his two nieces. Wilson is the sole trustee. Given this arrangement, who is responsible for the tax on the income earned in the trust?

a) The trust.

b) The trustee can elect to have either the trust assume responsibility for tax on the income or to allocate responsibility for the tax equally to the three beneficiaries.

c) Wilson and his two nieces, in equal proportions.

d) Wilson.

20.When an individual die, there is a deemed disposition of certain types of property.This would includeproperty held by one type of trust for which the deceased taxpayer was a settlor.That type of trust is:

a) An alter ego trust

b) A testamentary trust.

c) A joint spousal or common-law partner trust.

d) A discretionary trust.

21.As they relate to the T1 general tax return for individuals all of the following are deductible items (deductions) except:

a) RRSP contributions

b) Moving expenses

c) Charitable donations

d) Union dues

22.Elizabeth has a consulting business organizing fund-raisers for non-profit organizations.She charges $55 an hour, and an event usually takes about 350 hours to organize.The last fund-raiser she organized charged $95 per person and sold 400 tickets.The cost for the food and speaker was $43 per person.What is the value per person of the tax receipt that charity can issue?

a) $43.00

b) $0.00

c) $95.00

d) $52.00

23.Financial Planning Practice Standards provide guidance to CFP professionals. By setting forth these Practice Standards the FPSC achieve all of the following except:

a) Establishes the level of practice expected of a CFP professional

b) Establishes norms of professional practice to promote a consistent delivery of FP services

c) Serves FPSC's public interest mandate by protecting the interest of clients

d) establishes a data base of clients' complaints against Advisors.

24.Alex, a CFP professional, has a very diverse client base. Recent events in Alex's personal life have left him with a potential conflict of interest that affects nearly one-third of his client base. If Alex decides to disregard this situation, which principle under the FP code of ethics would he violate?

a) Competence.

b) Fairness.

c) Integrity.

d) Professionalism.