Tax planning is the legitimate arranging of one's financial activities in a manner that eliminates the related tax cost.
True / False
False
Distinguishing between legitimate tax planning and abusive tax avoidance can be difficult since you must decide whether the transactions have gone against the spirit of the tax system.
True / False
True
Shifting income to a future time period will always reduce the impact of taxes?
True / False
False
Cash flow is the common factor in developing the skills required for implementing tax planning activities.
True / False
True
The anti-avoidance rules are directed towards arm's length parties since they are the biggest group of taxpayers.
True / False
False
Publications and interpretations by the Canada Customs and Revenue Agency are part of federal income tax law.
True / False
False
All corporations incorporated in Canada are considered resident in Canada.
True / False
True
The taxation year of a Corporation can be changed with six months notice to the Canada Customs and Revenue Agency.
True / False
False
Individuals and corporations compute net income for tax purposes and taxable income in the same manner.
True / False
False
Each category of income is determined in accordance with its own set of fundamental principles
True / False
True
The principal factor used in making the distinction between business income and capital income is whether or not the property has the ability to provide a long-term benefit to its owner.
True / False
False
The main reason for the capital test is to remove those capital items that can vary considerably under GAAP and utilize a uniform system of allocation that applies to all business entities.
True / False
True
An automobile allowance paid by an employer is restricted to specified deductible rates.
True / False
False
A reserve for doubtful debts must be reasonable and the debt must have created income in order for it to be deductible.
True / False
True
One of the two permitted methods in valuing closing inventory is to value each item at the lower of cost or market value. However, there are also two permitted methods for determining the cost of an inventory item.
True / False
True
The standardized system for depreciable property eliminates the need for estimates of useful life and salvage value and, thus, eliminates the possibility of two similar businesses having different incomes.
True / False
True
A taxpayer is eligible for CCA is the taxpayer has legal title to the property.
True / False
False
There is a change in use of capital property whether it changes from personal to business use or from business to personal use.
True / False
True
The rate for a CCA class is the minimum that can be applied in any one year and, thus, CCA must be claimed.
True / False
False
The one-half rule applies only to additions of a class during a taxation year.
True / False
False
When a rental property is sold for a profit, the capital gain is separate from property income. However, the recapture of CCA on the same rental property is property income.
True / False
True
Personal assets, such as personal residence, cottage or car, can not be used as collateral to obtain loans for investment purposes.
True / False
False
Double taxation of foreign dividends received by individuals does not occur due to the mechanism of the gross-up and dividend tax credit.
True / False
False
Since rental revenue is included in taxable income when earned, rent deposits paid are not included in income until earned.
True / False
True
Assuming that a rental property appreciates in value, the claiming of CCA would effectively delay the tax on the equivalent amount of rental income until the property is sold.
True / False
True
