Question 1 (1 point)

In general, provincial income taxes for individuals are based on a specified percentage of federal tax payable.

Question 1 options:

	a) True
	b) False

Question 2 (1 point)

Part I of the Income Tax Act is the largest and most important part.

Question 2 options:

	a) True
	b) False

Question 3 (1 point)

Which of the following can be considered an advantage of an income tax system based on progressive rates?

Question 3 options:

a)	A progressive rate system is simpler to administer.

b)	A progressive rate system provides greater stability in the context of changing economic conditions.

c)	A progressive system discourages tax evasion.

d)	A progressive system encourages greater effort on the part of individuals.

Question 4 (1 point)

An individual is liable for income tax in Canada if he:

Question 4 options:

a)	is a resident in Canada.

b)	is a citizen of Canada.

c)	has lived in Canada at any time during the year.

d)	All of the above are required

Question 5 (1 point)

Which of the following types of income earned by a non-resident is NOT subject to Canadian income tax under Part I of the Income Tax Act?

Question 5 options:

a)	Employment income earned in Canada

b)	Business income earned in Canada

c)	Rental income earned in Canada

d)	Income from the disposition of Canadian real estate

Question 6 (1 point)

Of the following individuals, who would be a resident or deemed resident of Canada for tax purposes this year?

Alex is a U.S. citizen who commutes each day to Canada for employment purposes.

Bob is a U.S. citizen who lives in Canada during the week for employment purposes, but returns to the U.S. on weekends to the house he shares with his wife and children.

Charles is a Canadian citizen who lived in Toronto until March of last year, at which time he left for a four year aid mission in Africa under an agreement with the Canadian International Development Agency.

Dick is a Canadian citizen who goes to school in the U.S. for eight months of each year but returns to Canada to live with his parents each summer.

Question 6 options:

a)	Alex, Bob and Charles

b)	Bob, Charles and Dick

c)	Bob and Charles.

d)	Alex and Dick.

Question 7 (1 point)

Jamal, his wife and two teenage children are all Canadian citizens. For the last 2 years he and his family have been living in Mexico while he works for the Mexican subsidiary of a Canadian company. Jamal still owns his house in Canada. His wife and children stay there for 2 months in the summer and he spends 4 weeks a year there. The rest of the time the house is empty as his wife visits family in Canada regularly. Jamal has no definite plans to return to Canada and loves living in Mexico. However, since his mother-in-law is very ill, it is possible that his wife will have to return to Canada for at least 6 months to nurse her mother. Which of the following statements is correct?

Question 7 options:

a)	Jamal is considered a part-time resident of Canada for the 4 weeks he spends in Canada.

b)	If Jamal's wife returns alone to Canada to care for her mother, Jamal is considered a part-time resident of Canada for the 6 months she is in Canada.

c)	Jamal is considered a non-resident of Canada

d)	Since Jamal owns a house in Canada that is not rented out under a long-term lease he is considered a Canadian resident for income tax purposes.

Question 8 (1 point)

Which of the following statements with respect to the relationship between accounting Net Income and Net Income For Tax Purposes is NOT correct?

Question 8 options:

a)	Both accounting Net Income and Net Income For Tax Purposes value many assets at their historical cost

b)	Accounting Net Income requires that costs be matched with revenues.

c)	Net Income For Tax Purposes requires that costs be matched with revenues.

d)	Accounting Net Income is determined by applying Generally Accepted Accounting Principles.

Question 9 (1 point)

With respect to the calculation of Net Income For Tax Purposes, which of the following statements is NOT correct?

Question 9 options:

a)	Subdivision e deductions are subtracted from the total of all positive sources of income.

b)	Allowable capital losses for the year can only be deducted to the extent of taxable capital gains for the year

c)	Business losses can be netted against employment income in determining the positive amounts to be included under ITA 3(a) and 3(b).

d)	Property losses can only be deducted after the subtraction of Subdivision e deductions.

Question 10 (1 point)

Fred Hopkins has employment income of $45,000, a business loss of $14,000, capital gains of $20,000, capital losses of $12,000, and subdivision e deductions of $3,000. Fred's Net Income For Tax Purposes is equal to:

Question 10 options:

a)

$36,000.

b)

$50,000

c)

$39,000

d)

$32,000

Question 11 (1 point)

Which of the following amounts is NOT deducted in converting Net Income for Tax Purposes to Taxable Income?

Question 11 options:

a)	Losses of other years.

b)	The lifetime capital gains deduction.

c)	The excess of allowable capital losses over taxable capital gains for the year.

Question 12 (1 point)

Which of the following will always result in tax avoidance?

Question 12 options:

a)	Making contributions to a registered retirement savings plan.

b)	Making contributions to an employer's registered pension plan

c)	Making use of the lifetime capital gains deduction.

d)	Making maximum capital cost allowance deductions