With respect to the determination of Net Income For Tax Purposes, which of the following statements is correct? *

2 points

Allowable capital losses can be deducted to the extent of other positive sources of income.

If not used during the current period, all subdivision e deductions can be carried forward to subsequent periods.

Property losses are deducted from business income before the deduction of RRSP contributions.

If a business loss exceeds all other positive sources of income, Net Income For Tax Purposes is equal to nil.

Which of the following statements with respect to Canadian tax policy is NOT correct? *

2 points

Extremely high rates of tax will always encourage individuals to work harder so that they will have more after tax income.

The inability to harmonize the GST in some provinces has increased the complexity of tax compliance.

A progressive tax system is unfair to individuals with incomes that fluctuate significantly from year to year.

The economic burden of a particular tax may not fall on the same group that has the legal liability to pay the tax.