Income Tax Planning Part 1

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School

College for Financial Planning *

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Course

530

Subject

Finance

Date

Jan 9, 2024

Type

docx

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Uploaded by irina99

1 ) Shavin is a traveling salesman wh s approaching retirement. What amounts can Shawn deduct from his income? 1. fees Shawn paid to his finandial planner to prepare 2 detailed retirement plan 2, capital cost allowance on the car Shawn uses for employment which his employer requires s a condition of Shawn's employment, 3. fees Shawn paid directly in respect of his self-directed RRSP . interest on the loan Shawn took out using his home as collateral; the foan proceeds were used to purchase shares in Shawn's employer's corporation > 3) 1and4 @7 2and3 )e) 2and4 O d) 4only il Bohimil has 3 T4 slip that indicates a pension adjustment of $8,900. What statement is true? Bohimil must include this amount in his taxable income Bohimil can deduct this amount from his taxable income. Bahimil must report this amount on his tax return, but it will not affect his taxable income. Bohimil can claim a non-refundable tax credit in the amount of the pension adjustment. o Albert thinks he may be subject to alternative minimum tax this year because he sold his business for a capital gain of $420,000 and he claimed a capital gains deduction of $200,000. When complating his regular T1 return, Albert found that his taxable income was $320,000, What is Albert's adjusted taxable Income on his alternative minimum tax return? 0 a). 370,000 O)/b) $446,000 ©c) $520,000 d). $586,667.

() Gurpreet received $1,200 in cash dividends from ABC Corporation. From XYZ Corporation, he received a| stock dividend of 45 additional shares, each with an assigned value of $11, Both ABC and XYZ are Canadian-controlled private corporations whose entire income is taxed at the small business rate. What amount must Gurpreet report in taxable dividend income for the year? 0.2) '$1,200 b). $1,656 9 $1,695 d) $1,040 Larry gave 1,000 units of an equity fund to his wife, Belinda; another 1,000 units to his brother, Steven; and 1,000 units to his 12-year old son, Max, During the first year, the equity fund distributed capital gains, ividend income and interest income. What statement is true? a) Larry does not have to report the Interest income earned by Steven. b) Larry must re ort the capital gains earned by Max. €) Larry does not have to report the dividend income earned by Balinda d) Any dividend income ributed to Larry is not eligible for the dividend gross up and tax credit scheme. Sabrina sold her farm~—a qualified farm 3 d fishing property under the Income Tax Act—for proceed $950,000; the adjusted cost base of tha property is $150,000. Sabrina has not previously dispose qualified capital property in any form. What is the MINIMUM 3mount on which Sabrina must pay tax as a result of the disposition of her farm? 2) $400,0 b) $800,000

You purchased a USD strip bond at 9,350 CAD when the USD) bond's maturty, the USD/CAC was trading at .74. Later, at the was trading at .65, What amount of your forelgn exchange gain is taxable? b) $1.672 o 1872 @ 2,750 %, Break Dance Corporation sold 3 real estate in property had an ACB of $70,000, What amount dividend account? tment [ast year and received proceeds of $220,000, The i be credited to Break Dance Corporation's capital 2) $75,000 b) $150,000 o) $225,000 O 4 $35,000 Elzabeth incorporates a business and buys a franchis license that s vald for two years. What cost can Elizabeth NOT claim 35 an eligble capital expenture 4) tegal costs o incorporation 10 Mike borromed $500,000 and used the full amaunt to acquire shares in a qualfied smal business corporation. Over the next few years, he de eted $100,000 in nterest exp 3ted to the investment oan. This year, Mike sold the business for $950,000-he has ot prev dar f qualfied capital property. Assuming a Wetim gains exemption of $683, the MINIHUM amount nust pay tax following tha dispositon of his busine

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