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Income Tax Administration
Taxable Benefits
Investment Income
Personal Income Tax
Capital Gains I
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
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
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%
100
This is the form that is required by CRA for filing individual income tax returns
What is a T1 General Return
100
Because appreciation of capital property is taxed on disposition, only a portion of gains are included in taxable income, and there are some exceptions where gains are not taxed at all, the capital gains system is viewed as this
What is a tax-advantaged system
200
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
200
A taxable employment benefit may arise if an employer makes an automobile available for use to an employee. The amount of the benefit is calculated on these two components.
what is operating cost benefit, and standby charge
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
200
This term is used to describe individuals who are related by blood, adoption, or marriage. Mostly one place up, down, side and spouse
What is arm’s length
200
The capital gains inclusion rate is this for gains on publicly listed securities donated to charitable organizations and foundations, and for donations of ecologically sensitive land donated to a conservation charity
What is zero
300
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
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 this much of the loan
What is $25,000
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
300
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
300
Non-arm’s length parties are deemed to be transacting at this, regardless of the value that changes hands in the transfer of an asset
What is fair market value
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
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
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
400
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
400
When property purchased for personal use is changed to generate income, and where property purchased to generate income is changed to personal use, there is a deemed disposition at fair market value. A taxpayer may make one of two elections, which defers the inclusion of the capital gain until this happens
What is sale of property
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 the General Anti Avoidance Rule – GAAR
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%
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
500
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 registered pension plan (RPP)
500
This term is applied to the situation where a taxpayer incurs a loss on the disposition of capital property while an identical property is acquired by the taxpayer (or an affiliated person with 30 days before and after a disposition, resulting in the use of a capital loss being disallowed
What is superficial loss