FP242 Round 1

Income Tax Administration

100

This is the agency responsible for administering the income tax act and collecting the taxes owed by Canadian taxpayers

What is Canada Revenue Agency – CRA

200

Income tax installment payments are typically required when the taxpayer’s net tax owing, in either of the previous 2 years, is this amount or more

what is $3,000

300

- For a deceased taxpayer, the final/terminal tax return is due the later of either _______________or ___________

what is six months after death or April 30 – whichever is later

400

This is a United States government intergovernmental agreement with Canada, intended to deter and prevent tax evasion among US persons who maintain financial accounts outside the US. It Requires non-US financial services firms to report to the US IRS

what is the Foreign Account Compliance Act FATCA

500

To equip CRA to deal with abusive tax-avoidance schemes, the Finance Department created this, designed to impose tax on financial gains that accrue as a result of transactions that were undertaken for the sole purpose of avoiding income tax.

what is General Anti Avoidance Rule – GAAR

Taxable Benefits

100

Non-cash gifts and non-cash awards to an arm’s length employee are not taxable to the extent that the total aggregate value is less that this amount.

What is $500

200

A taxable employment benefit may arise if an employer makes an automobile available for use to an employee. This amount of the benefit has two components. These are called this and this.

what is operating cost benefit, and standby charge

300

A loan to an employee that is not made at the prescribed interest rate (calculated quarterly as the average rate charged on a 90-day t-bill) generates a taxable benefit equal to the difference between the prescribed rate for the number of days, less any interest actually paid by the employee. For a home relocation loan, there is a deduction equal to the taxable benefit amount on the first how much of the loan?

what is $25,000

400

With employee stock options, for a taxable benefit to arise, the option must be exercised and the shares purchased or acquired. The taxable benefit amount is the amount by which the fair market value exceeds this.

what is the exercise price

500

With employee stock options, there is an offsetting deduction in certain circumstances (if the fair market value of the shares when the options were granted was equal to or less than the exercise price of the shares plus any costs associated with acquiring the options) of this amount

what is 50%

Investment Income

100

Dividends received from taxable Canadian corporations are eligible for special tax treatment. Eligible dividends, received from public corporations, are grossed up by this amount

what is 38%

200

Interest income can be accounted for using cash method, receivable method, and annual accrual. Cash method reports income when it is received, receivable method reports income when it becomes due. Under the annual accrual basis, a taxpayer includes interest income accrued to each what

what is anniversary date

300

If a taxpayer is in the business of renting property, as demonstrated by the amount of capital and energy invested, he/she would include net rental income as business income. If the taxpayer does not fit the description, rental income is considered to be this

What is passive investment income

400

When calculating net rental income, this is the category that include the following costs: property taxes, mortgage interest, utilities, advertising, garbage removal, office supplies, painting, carpet, legal fees, accounting feed, maintenance and repairs

What are current expenses

500

This is established as the increase in the paid-up capital of the corporation, distributed to common shareholders. The grossed up value of which is included in taxable income

What is a stock dividend

Deductions

100

Individuals can deduct expenses paid for the employment use of a work space in the home as long as one of these two criteria are met

what is work space where the individual does his/her work OR designated workspace used only to earn employment income

Personal Tax

100

This is the form that is required by CRA for filing individual income tax returns

what is a T1 General Return

200

Where the employer covers the cost of group wage-loss replacement plan (ie disability insurance), if the employee pays the premium, receipt of payment (benefits under the plan) are non-taxable. If the employer pays the premium but charge it as a taxable benefit to the employee, benefit payments are non-taxable. Where the employer pay the premium and does not charge it as a taxable benefit, any payments received are this

what is taxable

300

Pension income splitting is where a taxpayer is permitted to allocate up to 50% of eligible pension income to a spouse/common-law partner. This type of income is the only type that is eligible to be split prior to the recipient’s age 65.

what is defined benefit pension income or pension from RPP registered pension plan