Taxation MCQs

Steve and Kay Briar, US citizens, were married for the entire 2012 calendar year. In 2012, Steve gave a $30,000 cash gift to his sister. The Briars ...

$30,000
$ 6,000
$ 4,000
$0

In 2012, Sayers, who is single, gave an outright gift of $50,000 to a friend, Johnson, who needed the money to pay medical expenses. In filing the 2...

$0
$12,000
$13,000
$50,000

During 2013, Blake transferred a corporate bond with a face amount and fair market value of $20,000 to a trust for the benefit of her sixteen-year o...

$20,000
$14,000
$ 8,710
$0

Under the unified rate schedule for 2013,

Lifetime taxable gifts are taxed on a noncumulative basis.
Transfers at death are taxed on a noncumulative basis.
Lifetime taxable gifts and transfers at death are taxed on a cumulative basis.
The gift tax rates are 5% higher than the estate tax rates.

Which of the following requires filing a gift tax return, if the transfer exceeds the available annual gift tax exclusion?

Medical expenses paid directly to a physician on behalf of an individual unrelated to the donor.
Tuition paid directly to an accredited university on behalf of an individual unrelated to the donor.
Payments for college books, supplies, and dormitory fees on behalf of an individual unrelated to the donor.
Campaign expenses paid to a political organization

On July 1, 2012, Vega made a transfer by gift in an amount sufficient to require the filing of a gift tax return. Vega was still alive in 2013. If V...

March 15, 2013.
April 15, 2013.
June 15, 2013.
June 30, 2013.

When Jim and Nina became engaged in April 2012, Jim gave Nina a ring that had a fair market value of $50,000. After their wedding in July 2012, Jim ...

$ 63,000
$ 75,000
$113,000
$125,000

Raff created a joint bank account for himself and his friendâ€™s son, Dave. There is a gift to Dave when

Raff creates the account.
Raff dies.
Dave draws on the account for his own benefit.
Dave is notified by Raff that the account has been created.

Fred and Ethel (brother and sister), residents of a noncommunity property state, own unimproved land that they hold in joint tenancy with rights of ...

$140,000
$240,000
$260,000
$300,000

Bell, a cash-basis calendar-year taxpayer, died on June 1, 2012. In 2012, prior to her death, Bell incurred $2,000 in medical expenses. The executor...

The estate tax return.
Bellâ€™s final income tax return.
The estate income tax return.
The executorâ€™s income tax return.

If the executor of a decedentâ€™s estate elects the alternate valuation date and none of the property included in the gross estate has been sol...

12
9
6
3

What amount of a decedentâ€™s taxable estate is effectively taxfree if the maximum basic exclusion amount is taken during 2013?

$1,000,000
$1,455,800
$3,500,000
$5,000,000

Which of the following credits may be offset against the gross estate tax to determine the net estate tax of a US citizen dying during 2013? Applic...

Yes Yes
No No
No Yes
Yes No

Fred and Amy Kehl, both US citizens, are married. All of their real and personal property is owned by them as tenants by the entirety or as joint te...

Includes 50% of the value of all property owned by the couple, regardless of which spouse furnished the original consideration.
Includes only the property that had been acquired with the funds of the deceased spouse.
Is governed by the federal statutory provisions relating to jointly held property, rather than by the decedentâ€™s interest in community property vested by state law, if the Kehls reside in a community property state.
Includes one-third of the value of all real estate owned by the Kehls, as the dower right in the case of the wife or curtesy right in the case of the husband.

In connection with a â€™buy-sellâ€™ agreement funded by a cross-purchase insurance arrangement, business associate Adam bought a policy on...

Includible in Burrâ€™s gross estate, if Burr owns 50% or more of the stock of the corporation.
Includible in Burrâ€™s gross estate only if Burr had purchased a similar policy on Adamâ€™s life at the same time and for the same purpose.
Includible in Burrâ€™s gross estate, if Adam has the right to veto Burrâ€™s power to borrow on the policy that Burr owns on Adamâ€™s life.
Excludible from Burrâ€™s gross estate.

Following are the fair market values of Waldâ€™s assets at the date of death: Personal effects and jewelry $1,750,000 Land bought by Wald with...

$1,750,000
$3,800,000
$5,000,000
$5,550,000

Which one of the following is a valid deduction from a decedentâ€™s gross estate?

Foreign death taxes.
Income tax paid on income earned and received after the decedentâ€™s death.
Federal estate taxes.
Unpaid income taxes on income received by the decedent before death.

Eng and Lew, both US citizens, died in 2013. Eng made taxable lifetime gifts of $400,000 that are not included in Eng’s gross estate. Lew made no ...

No No
No Yes
Yes No
Yes Yes

With regard to the federal estate tax, the alternate valuation date

Is required to be used if the fair market value of the estateâ€™s assets has increased since the decedentâ€™s date of death.
If elected on the first return filed for the estate, may be revoked in an amended return provided that the first return was filed on time.
Must be used for valuation of the estateâ€™s liabilities if such date is used for valuation of the estateâ€™s assets.
Can be elected only if its use decreases both the value of the gross estate and the estate tax liability.

Which of the following forms of business organization is directly subject to tax?

Joint venture
Corporation
Limited Partnership
Partnership

Ross, a calendar-year, cash-basis taxpayer who died in June 2012, was entitled to receive a $10,000 accounting fee that had not been collected befor...

Only the decedentâ€™s final individual income tax return.
Only the estateâ€™s fiduciary income tax return.
Only the estate tax return.
Both the fiduciary income tax return and the estate tax return.

Alan Curtis, a US citizen, died on March 1, 2013, leaving an adjusted gross estate with a fair market value of $5,400,000 at the date of death. Unde...

2 1/2
3 1/2
9
12

Alan Curtis, a US citizen, died on March 1, 2013, leaving an adjusted gross estate with a fair market value of $5,400,000 at the date of death. Unde...

$ 450,000
$ 780,800
$ 900,000
$3,000,000

In 2006, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June 2012, when the stockâ€™s fair market value was $7,000, Edwin gave t...

$0
$5,000
$7,000
$9,000

In 2006, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June 2012, when the stockâ€™s fair market value was $7,000, Edwin gave t...

$0
$5,000
$7,000
$9,000

For 2013, the generation-skipping transfer tax is imposed

Instead of the gift tax.
Instead of the estate tax.
At the highest tax rate under the transfer tax rate schedule.
When an individual makes a gift to a grandparent.

For 2013, the generation-skipping transfer tax is imposed

Instead of the gift tax.
Instead of the estate tax.
At the highest tax rate under the transfer tax rate schedule.
When an individual makes a gift to a grandparent.

Under the terms of the will of Melvin Crane, $10,000 a year is to be paid to his widow and $5,000 a year is to be paid to his daughter out of the es...

$0
$ 4,000
$ 8,000
$10,000

A distribution from estate income, that was currently required, was made to the estate’s sole beneficiary during its calendar year. The maximum am...

Capital gain income.
Ordinary gross income.
Distributable net income.
Net investment income.

With regard to estimated income tax, estates

Must make quarterly estimated tax payments starting no later than the second quarter following the one in which the estate was established.
Are exempt from paying estimated tax during the estateâ€™s first two taxable years.
Must make quarterly estimated tax payments only if the estateâ€™s income is required to be distributed currently.
Are not required to make payments of estimated tax.

A complex trust is a trust that

Must distribute income currently, but is prohibited from distributing principal during the taxable year.
Invests only in corporate securities and is prohibited from engaging in short-term transactions.
Permits accumulation of current income, provides for charitable contributions, or distributes principal during the taxable year.
Is exempt from payment of income tax since the tax is paid by the beneficiaries.

The 2012 standard deduction for a trust or an estate in the fiduciary income tax return is

$0
$650
$750
$800

Ordinary and necessary administration expenses paid by the fiduciary of an estate are deductible

Only on the fiduciary income tax return (Form 1041) and never on the federal estate tax return (Form 706).
Only on the federal estate tax return and never on the fiduciary income tax return.
On the fiduciary income tax return only if the estate tax deduction is waived for these expenses.
On both the fiduciary income tax return and on the estate tax return by adding a tax computed on the proportionate rates attributable to both returns.

An executor of a decedentâ€™s estate that has only US citizens as beneficiaries is required to file a fiduciary income tax return, if the estat...

$ 400
$ 500
$ 600
$1,000

The charitable contribution deduction on an estateâ€™s fiduciary income tax return is allowable

If the decedent died intestate.
To the extent of the same adjusted gross income limitation as that on an individual income tax return.
Only if the decedentâ€™s will specifically provides for the contribution.
Subject to the 2% threshold on miscellaneous itemized deductions.

On January 2, 2013, Carlt created a $300,000 trust that provided his mother with a lifetime income interest starting on January 2, 2013, with the re...

Carltâ€™s mother.
Carltâ€™s son.
Carlt.
The trust.

For income tax purposes, the estateâ€™s initial taxable period for a decedent who died on October 24

May be either a calendar year, or a fiscal year beginning on the date of the decedentâ€™s death.
Must be a fiscal year beginning on the date of the decedentâ€™s death.
May be either a calendar year, or a fiscal year beginning on October 1 of the year of the decedentâ€™s death.
Must be a calendar year beginning on January 1 of the year of the decedentâ€™s death.

The private foundation status of an exempt organization will terminate if it

Becomes a public charity.
Is a foreign corporation.
Does not distribute all of its net assets to one or more public charities.
Is governed by a charter that limits the organizationâ€™s exempt purposes.

Which of the following exempt organizations would be eligible to satisfy its annual filing requirement by filing Form 990-N (e-Postcard)?

Church.
Private foundation.
An exempt organization with $20,000 of gross receipts.
An exempt organization with $3,500 of gross income from an unrelated business.

To qualify as an exempt organization other than a church or an employeesâ€™ qualified pension or profit-sharing trust, the applicant

Cannot operate under the â€™lodge systemâ€™ under which payments are made to its members for sick benefits.
Need not be specifically identified as one of the classes on which exemption is conferred by the Internal Revenue Code, provided that the organizationâ€™s purposes and activities are of a nonprofit nature.
Is barred from incorporating and issuing capital stock.
Must file a written application with the Internal Revenue Service

To qualify as an exempt organization, the applicant

May be organized and operated for the primary purpose of carrying on a business for profit, provided that all of the organizationâ€™s net earnings are turned over to one or more tax exempt organizations.
Need not be specifically identified as one of the classes upon which exemption is conferred by the Internal Revenue Code, provided that the organizationâ€™s purposes and activities are of a nonprofit nature.
Must not be classified as a social club.
Must not be a private foundation organized and operated exclusively to influence legislation pertaining to protection of the environment.

Carita Fund, organized and operated exclusively for charitable purposes, provides insurance coverage, at amounts substantially below cost, to exempt...

Exempt from tax.
Treated as unrelated business income.
Subject to the same tax provisions as those applicable to insurance companies.
Considered â€™commercial-typeâ€™ as defined by the Internal Revenue Code.

The filing of a return covering unrelated business income

Is required of all exempt organizations having at least $1,000 of unrelated business taxable income for the year.
Relieves the organization of having to file a separate annual information return.
Is not necessary if all of the organizationâ€™s income is used exclusively for charitable purposes.
Must be accompanied by a minimum payment of 50% of the tax due as shown on the return, with the balance of tax payable six months later.

A condominium management association wishing to be treated as a homeowners association and to qualify as an exempt organization for a particular yea...

Need not file a formal election.
Must file an election as of the date the association was organized.
Must file an election at the beginning of the associationâ€™s first taxable year.
Must file a separate election for each taxable year no later than the due date of the return for which the election is to apply.

An organization wishing to qualify as an exempt organization

Is prohibited from issuing capital stock.
Is limited to three prohibited transactions a year.
Must not have non-US citizens on its governing board.
Must be of a type specifically identified as one of the classes on which exemption is conferred by the Code.

Which one of the following statements is correct with regard to exempt organizations?

An organization is automatically exempt from tax merely by meeting the statutory requirements for exemptions.
Exempt organizations that are required to file annual information returns must disclose the identity of all substantial contributors, in addition to the amount of contributions received.
An organization will automatically forfeit its exempt status if any executive or other employee of the organization is paid compensation in excess of $150,000 per year, even if such compensation is reasonable.
Exempt status of an organization may not be retroactively revoked.

To qualify as an exempt organization, the applicant

Must fall into one of the specific classes upon which exemption is conferred by the Internal Revenue Code.
Cannot, under any circumstances, be a foreign corporation.
Cannot, under any circumstances, engage in lobbying activities.
Cannot be exclusively a social club.

To qualify as an exempt organization,

A written application need not be filed if no applicable official form is provided.
No employee of the organization is permitted to receive compensation in excess of $100,000 per year.
The applicant must be of a type specifically identified as one of the classes upon which exemption is conferred by the Code.
The organization is prohibited from issuing capital stock.

Hope is a tax-exempt religious organization. Which of the following activities is (are) consistent with Hopeâ€™s tax-exempt status? I. Conduct...

I only.
II only.
Both I and II.
Neither I nor II.

The organizational test to qualify a public service charitable entity as tax-exempt requires the articles of organization to I. Limit the purpose of...

I only.
II only.
Both I and II.
Neither I nor II.

Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income? I. Selling articles mad...

I only.
II only.
Both I and II.
Neither I nor II.

Which one of the following statements is correct with regard to unrelated business income of an exempt organization?

An exempt organization that earns any unrelated business income in excess of $100,000 during a particular year will lose its exempt status for that particular year.
An exempt organization is not taxed on unrelated business income of less than $1,000.
The tax on unrelated business income can be imposed even if the unrelated business activity is intermittent and is carried on once a year.
An unrelated trade or business activity that results in a loss is excluded from the definition of unrelated business.

Which of the following activities regularly carried out by an exempt organization will not result in unrelated business income?

The sale of laundry services by an exempt hospital to other hospitals.
The sale of heavy-duty appliances to senior citizens by an exempt senior citizenâ€™s center.
Accounting and tax services performed by a local chapter of a labor union for its members.
The sale by a trade association of publications used as course materials for the associationâ€™s seminars that are oriented towards its members.

If an exempt organization is a corporation, the tax on unrelated business taxable income is

Computed at corporate income tax rates.
Computed at rates applicable to trusts.
Credited against the tax on recognized capital gains.
Abated.

During 2012, Help, Inc., an exempt organization, derived income of $15,000 from conducting bingo games. Conducting bingo games is legal in Helpâ€...

The entire $15,000 is subject to tax at a lower rate than the corporation income tax rate.
The entire $15,000 is exempt from tax on unrelated business income.
Only the first $5,000 is exempt from tax on unrelated business income.
Since Help has unrelated business income, Help automatically forfeits its exempt status for 2012.

Which of the following statements is correct regarding the unrelated business income of exempt organizations?

If an exempt organization has any unrelated business income, it may result in the loss of the organizationâ€™s exempt status.
Unrelated business income relates to the performance of services, but not to the sale of goods.
An unrelated business does not include any activity where all the work is performed for the organization by unpaid volunteers.
Unrelated business income tax will not be imposed if profits from the unrelated business are used to support the exempt organizationâ€™s charitable activities.

An incorporated exempt organization subject to tax on its 2012 unrelated business income

Must make estimated tax payments if its tax can reasonably be expected to be $100 or more.
Must comply with the Code provisions regarding installment payments of estimated income tax by corporations.
Must pay at least 70% of the tax due as shown on the return when filed, with the balance of tax payable in the following quarter.
May defer payment of the tax for up to nine months following the due date of the return.

If an exempt organization is a charitable trust, then unrelated business income is

Not subject to tax.
Taxed at rates applicable to corporations.
Subject to tax even if such income is less than $1,000.
Subject to tax only for the amount of such income in excess of $1,000.

With regard to unrelated business income of an exempt organization, which one of the following statements is true?

If an exempt organization has any unrelated business income, such organization automatically forfeits its exempt status for the particular year in which such income was earned.
When an unrelated trade or business activity results in a loss, such activity is excluded from the definition of unrelated business.
If an exempt organization derives income from conducting bingo games, in a locality where such activity is legal, and in a state that confines such activity to nonprofit organizations, then such income is exempt from the tax on unrelated business income.
Dividends and interest earned by all exempt organizations always are excluded from the definition of unrelated business income.

Miramar Corp. has total business income of $1 million, and in State XY has a sales factor of 60%, a payroll factor of 50%, and a property factor of ...

60%; $600,000 business income
50%; $500,000 business income
53%; $530,000 business income
53%; $1,000,000 business income

Miramar Corp. has total business income of $1 million, and in State XY has a sales factor of 60%, a payroll factor of 50%, and a property factor of ...

50%
52%
54.75%
60%

Which one of the following statements regarding the foreign operations of Glencoe Corporation (a domestic corporation) is correct?

Glencoeâ€™s earnings from its foreign operations are not subject to US income tax.
Glencoe may take a deduction, but not a credit, for the income taxes paid to a foreign country.
Glencoe may take a credit, but not a deduction, for the income taxes paid to a foreign country.
Glencoe may take either a deduction or a tax credit, but not both, for the income taxes paid to a foreign country.

For the current year, Crocker Corp., a domestic corporation, has US taxable income of $700,000, which includes $100,000 from a foreign division. Cro...

$ 6,400
$30,000
$35,000
$40,000

For the current year, Crocker Corp., a domestic corporation, has US taxable income of $700,000, which includes $100,000 from a foreign division. Cro...

Can be carried back two years and forward twenty years.
Can be carried back one year and forward ten years.
Can be carried back two years and forward five years.
Cannot be carried to other tax years.

The following information pertains to Raubolt Corporationâ€™s operations for the current year: Worldwide taxable income $300,000 US source tax...

$32,000
$36,300
$38,400
$39,500

When an entity changes its method of accounting for income taxes, which has a material effect on comparability, the auditor should refer to the chan...

Explain why the change is justified under generally accepted accounting principles.
Describe the cumulative effect of the change on the audited financial statements.
State the auditorâ€™s explicit concurrence with or opposition to the change.
Refer to the financial statement note that discusses the change in detail.

Which from the following is NOT among the heads of â€œTotal Incomeâ€?

Salary
Income from property/business
Income from sales
Capital gains

Custom duty is levied on goods I. imported into Pakistan II. exported from Pakistan III. transported through Pakistan

I only
II only
I and II
I and III

Excise duties are levied on a limited number of goods manufactured, and services provided _____ Pakistan.

in
outside
both A and B
None of these

All exports are liable to _____ Federal Excise Duty.

0%
5%
10%
17%

Which from the following is/are considered as â€œGood(s)â€?

Actionable claims
Money
Stocks, Shares and Securities
None of these

Which Section of the Sales Tax Act 1990 stipulates the goods that are exempt from levy of sales tax?

Section 4
Section 10
Section 13
Section 15

Which Schedule of Section 13 of the Sales Tax Act 1990 includes a list of items on which no sales tax is levied?

Third Schedule
Fourth Schedule
Fifth Schedule
Sixth Schedule

Sales Tax is levied at the rate of _____ on all goods imported into Pakistan.

0%
5%
10%
17%

The sales tax on goods imported into Pakistan is paid by the

importers
exporters
both A and B
None of these

All supplies made in Pakistan by a registered person in the course of any business carried on by him, is liable to pay __________ sales tax.

0%
5%
10%
17%

Identify from the following cases where married personâ€™s allowance will be granted to the taxpayer who files the tax return for the year of ass...

I only
I & II only
II & III only
I, II & III

Under the Inland Revenue Ordinance, which of the following is/are grounds for a taxpayer to apply to an assessor for correction of errors in a tax re...

III only
I & II only
II & III only
I, II & III

XYZ Limited is considering providing medical benefits to its employees. Which of the following ways of providing such benefits will be efficient to t...

I only
I & II only
II & III only
I, II & III

Proceeds of a life insurance policy payable to the estateâ€™s executor, as the estateâ€™s representative, are

Includible in the decedentâ€™s gross estate only if the premiums had been paid by the insured.
Includible in the decedentâ€™s gross estate only if the policy was taken out within three years of the insuredâ€™s death under the â€™contemplation of deathâ€™ rule.
Always includible in the decedentâ€™s gross estate.
Never includible in the decedentâ€™s gross estate.

Which of the following is a complete list of the primary types of income that are applicable to general business activity?

Business, property, capital gains, employment and other.
Business, property and capital gains.
Business, property and employment.
Business, property, employment and capital gains.

Which of the following situations does not reflect all of the key variables to be considered in the business decision process?

Two corporations start a venture to earn business income in Ontario through a joint venture.
A corporation pays a dividend to its shareholders who are all individuals residing in Alberta.
A Saskatchewan corporation is expanding its retail operations into Manitoba.
A corporation is increasing its compensation to employees who all reside in B.C.

Which of the following would not be a responsibility of a functional manager.

To maintain updated information on changes in tax law and how to interpret and apply it.
To consider the tax impact of alternative strategies under investigation.
To identify alternatives that will minimize tax without creating an overpowering impact on non-tax-related areas.
To justify with non-tax and non-quantitative reasons the choice of a higher-tax alternative.

Which of the following would not be an efficient management approach to taxation?

Income tax should be treated as a controllable expense.
Cash flows, whether for expenses or asset acquisitions, should be considered after tax.
Responsibility for tax effects should be allocated to the financial executive of the company.
Management must have a means of bridging the gap between interpreting information and applying it to business decisions.

Which of the following does not correctly describe a fundamental rule in determining employment income?

All remuneration from an office or employment is included in employment income at the point in time that it is earned.
Subject to specific exceptions, all benefits enjoyed by employees by virtue of their employment are included in employment income.
Subject to specific exceptions, all amounts received as an allowance are included in employment income.
Except for a specific list of items, no deductions are permitted in arriving at employment income.

Which of the following is not a condition for the taxation of maintenance payments received from a former spouse?

The payments are received as periodic payments.
The payments total more than $10,000 in a year.
The payments are made pursuant to a written agreement.
The payments are for the maintenance of the former spouse.

Which of the following does not correctly describe a condition for the deductibility of moving expenses?

Moving expenses are limited to employment income at the new location.
The new residence must be at least 40 kilometres closer to the new work location than the previous residence.
Moving expenses are deductible if incurred for relocation to commence an employment.
Moving expenses are deductible if incurred to attend a university or other post-secondary school.

Which of the following types of income should be included in earned income when calculating an individualâ€™s RRSP contribution limit?

Interest income
Dividends income
Rental income
Capital gains

When is it mandatory to convert all of an RRSPâ€™s funds to a pension vehicle?

By December 31 of the year in which the individual reaches 60.
By December 31 of the year in which the individual reaches 65.
By December 31 of the year in which the individual reaches 69.
By December 31 of the year in which the individual reaches 70.

Which of the following rules would apply to a vendor who is not dealing at armâ€™s length with a purchaser?

If the property is sold at a price that is more than its fair market value, it is deemed to have been sold at the original cost.
If the property is sold at a price that is more than its fair market value, it is deemed to have been sold at fair market value.
If the property is sold at a price that is less than its fair market value, it is deemed to have been sold at the total of discounted cash flows.
If the property is sold at a price that is less than its fair market value, it is deemed to have been sold at fair market value.

A student had income from a RESP for $12,000, a scholarship for $5,000, a prize for achievement in a field of endeavour for $1,500 and a research gran...

$18,500
$19,000
$19,500
$20,000

An individual received monthly payments of $500 as alimony and $1,000 as child maintenance for 2 children from a former spouse pursuant to a court ord...

$(6,000)
$(5,000)
$7,000
$8,000

In 20X1, an individual had employment income of $73,000, a rental loss of $5,000 and interest income of $2,000. The employer and employee each made a ...

$8,240
$8,600
$9,140
$10,240

An individual sold two pieces of land with a fair market value of $30,000 each and an original cost of $25,000 each. She sold one to her related corpo...

$0
$2,500
$5,000
$7,500

A manufacturing business owner is considering the sale of the business with assets in inventory, land, building, equipment and goodwill. Which of thes...

Inventory
Land
Equipment
Goodwill

Which of the following does not correctly describe the primary relationship between a corporation and a shareholder.

Profits earned by the corporation are subject to income tax that is the first level of taxation on the income.
The after-tax profits can either be retained by the corporation or distributed to the shareholders.
If the corporate profits are retained, the unrealized gain on share value is included in the shareholderâ€™s taxable income.
If the corporate profits are distributed as dividends, the dividends are included in the shareholderâ€™s taxable income.

Which of following special reductions of net income does not apply to a corporation?

Capital gain deduction
Donations
Loss carry-overs
Dividends from other taxable Canadian corporations

As a result of a change in control to an unrelated party, there are limits on loss carry-overs. Which of the following does not correctly describe one...

At the date of the change in control, capital properties are deemed to have been sold at their tax cost if that value is below their market value.
Non-capital loss carry-overs can only be deducted against losses from the same or similar line of business.
If the non-capital loss carry-overs are to be utilized, the business that incurred the losses can not be terminated.
There is deemed to be a year end at the date of the change in control and net capital losses are deemed to expire at this date.

Which of the following corporate taxes is refundable upon certain criteria being satisfied?

Federal tax
Federal surtax
Federal tax on investment income
Provincial tax

Which of the following corporate tax reductions apply to all levels of taxable income of a Canadian-controlled private corporation?

Federal tax abatement
Special reduction for CCPCâ€™s
Small business deduction
Manufacturing and processing deduction

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Taxation MCQs