Income Tax MCQs

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Which of the following is not a category of tax planning opportunities?






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When analyzing alternative courses of action with future cash flows, which of the following factors would have the highest degree of certainty.






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Which of the following is not a skill in implementing tax planning activities?






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Which of the following is not a factor in reviewing cash flows?






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Which of the following statements correctly describes the anti-avoidance rules included in the Income Tax Act?






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Which of the following would be one of the factors considered in determining the residency of an individual?






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Which of the following statements describes the tax status of a Canadian corporation that carries on a business in Canada and also operates a major br...






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Which of the following types of income is often referred to as passive income?






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Which of the following statements correctly describes the treatment of losses in the aggregating formula?






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An individual had business income of $75,000, capital loss of $75,000, property loss of $50,000 and capital gain of $50,000. What is the individual’...






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Which of the following entities is taxed directly on its profits?






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Which of the following sources of income of a non-resident would be subject to withholding tax?






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An individual had received employment income of $50,000 during 2001. She was also sole shareholder of a corporation that earned $100,000 after paying ...






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An individual had received employment income of $50,000 during 2001. He had a 50% interest in a partnership that lost $120,000 for the year ended Marc...






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A Canadian corporation has a branch office in Great Britain that earns CDN$1,000,000 and pays 50% in taxes to the government of Great Britain. The Can...






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Under which of the following circumstances would it be beneficial for an employee to defer receipt of remuneration?






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Which of the following is a taxable benefit?






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Which of the following correctly describes an aspect of taxable allowances?






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Which of the following is not a criteria for travel related expenses to be deductible from employment income?






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An individual received a salary in 2001, a bonus in 2001 based on performance in 2000, a commission in 2002 based on sales made in 2001, and a directo...






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A single-parent employee received fringe benefits as: premiums under provincial hospitalization plans ($300); tuition fees for software used at work (...






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A manager was provided with a company car. After four years, the unamortized cost of the car was $7,200 of the original cost of $30,000. Of the 2,000 ...






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An employee qualifies to claim travel expenses. He travels by leased vehicle for $900/month. While travelling he incurs costs for gas ($2,000), repair...






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An employee, who is not a salesperson, qualifies to claim 15% of her home as work space in the home. Home related expenses are mortgage interest ($7,0...






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Which of the following is not a general principle to be used in determining profit for income tax purposes.






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Which of the following is considered the primary test for the deductibility of expenses in arriving at business income?






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Which of the following items would not be considered an outlay on capital account?






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Which of the following interest expenses would be denied and added to the related capital item?






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Which of the following expenses can be deducted on an accrual basis?






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Which of the following would be treated as part of a business activity?






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A small business deducted the future estimated cost of honouring coupons that were distributed in a local flyer. Which of the following tests would no...






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A small business deducted the expense of extending the cargo area of its delivery truck. Which of the following tests would not be satisfied by this e...






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A business suffered fire damage to equipment. Repairs were $10,000 and insurance proceeds were $13,000. How should the insurance proceeds be treated f...






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A business entertained clients at a golf club and incurred the following expenses: annual dues $2,500, green fees $1,200, meals $1,000 and re-gripping...






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Which of the following type of interest income would be treated as business income?






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Which of the following methods of recognizing interest income must be used by corporations?






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Which of the following correctly describes the treatment of dividends?






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Which of the following does not correctly describe the CCA rules for rental properties?






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The after-tax yields on different basic investments can vary considerably. Which of the following could result in delaying the timing of tax the most?...






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An individual purchases a $10,000, 3-year, 7% bond on March 31, 20X1 which compounds annually and payable in full at the end of 3 years. How much inte...






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A corporation with a December 31 year end purchases a $50,000, 3-year, 8% bond on April 30, 20X1 which compounds annually and payable in full at the e...






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An individual provided mortgage financing in 20X1 to an entrepreneur. He borrowed $25,000 @ 5% annual interest and incurred mortgage appraisal and reg...






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Corporation X paid $10,000 in dividends to Corporation Y. What amount of dividends should be included in Corporation Y’s net income?






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A corporation, whose sole line of business was the rental of residential properties, had one class 1 building with a UCC of $100,000. Rental revenue, ...






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Which of the following types of losses can be carried forward indefinitely?






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What is the maximum carry-over period for farming losses?






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Which of the following would be a valid means of reducing expenses in order to utilize losses that may expire?






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Which of the following does not correctly describe a condition of the capital gain deduction?






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Which of the following is included in the first category of federal tax credits?






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An individual with only employment income in 20X1 of $50,000 had loss carryovers of net capital losses ($20,000), non-capital losses ($20,000), and fa...






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In 20X5, an individual had employment income of $80,000 and a net capital loss of $7,500. He also had a 75% interest in a partnership with a $50,000 o...






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An individual earned a $550,000 gain from the disposal of qualifying farm property. He also had unused farm loss carryovers of $10,000 and accumulated...






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An individual earned $65,000 in salary during 20X1. The following deductions were made from her salary: RPP contribution of $5,000, CPP & EI contribut...






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A retired individual supported himself and a spouse in 20X1 on his pension and investment income. Pension income was $30,000 from a pension fund and i...