Is interest paid on money borrowed to make a contribution to a TFSA tax deductible Why or why not 2 marks What basic tax planning can be done with CCA deductions in a scenario where the taxpayer anticipates a significant increase in tax rates in future years 1 mark Anna would like to purchase $50,000 of dividend paying common shares in various Canadian public corporations Anna is considering whether she should acquire the stock portfolio personally or via her RRSP She believes the stock portfolio will significantly appreciate in value in the near future Anna plans to sell the stock portfolio in 5 years for reinvestment into Canadian mutual funds What are the tax disadvantages of acquiring the shares personally, as opposed to purchasing the shares through her RRSP Explain Hint first, consider personal tax implications of each investment alternative and then compare tax results (calculations are not required) 6 marks Josh purchased a personal vacation home (Muskoka cottage) through his corporation Josh uses the cottage to enjoy his vacations with friends and family The corporation funded the purchase and pays for all expenses to maintain the property Do you see any tax concern(s) If yes, what concern(s) and why 2 marks Jenny holds a stock portfolio consisting of Canadian equities (shares of Canadian public corporations) and U S equities (shares of U S public corporations) Both the Canadian and U S equities pay quarterly dividends Explain how the Canadian and U S dividends are taxed when received by Jenny 2 marks

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Posted on Oct 01, 2024

Is interest paid on money borrowed to make a contribution to a TFSA tax deductible? Why or why not? [2 marks]

What basic tax planning can be done with CCA deductions in a scenario where the taxpayer anticipates a significant increase in tax rates in future years? [1 mark]

Anna would like to purchase $50,000 of dividend paying common shares in various Canadian public corporations. Anna is considering whether she should acquire the stock portfolio personally or via her RRSP. She believes the stock portfolio will significantly appreciate in value in the near future. Anna plans to sell the stock portfolio in 5 years for reinvestment into Canadian mutual funds. What are the tax disadvantages of acquiring the shares personally, as opposed to purchasing the shares through her RRSP? Explain. Hint: first, consider personal tax implications of each investment alternative and then compare tax results (calculations are not required). [6 marks]

Josh purchased a personal vacation home (Muskoka cottage) through his corporation. Josh uses the cottage to enjoy his vacations with friends and family. The corporation funded the purchase and pays for all expenses to maintain the property. Do you see any tax concern(s)? If yes, what concern(s) and why? [2 marks]

Jenny holds a stock portfolio consisting of Canadian equities (shares of Canadian public corporations) and U.S. equities (shares of U.S. public corporations). Both the Canadian and U.S. equities pay quarterly dividends. Explain how the Canadian and U.S. dividends are taxed when received by Jenny. [2 marks]