Question 1

Jack sold $20,000 worth of stocks that were purchased one year ago for $15,000. He is in a 22% tax bracket. Jack's capital gains taxes are:

Accepted Answer

A)  $500. 
B)  $550. 
C)  $1,100. 
D)  $2,500. 
E)  $4,400. 
A)  $500. 
B)  $550. 
C)  $1,100. 
D)  $2,500. 
E)  $4,400. B

Question 2

An exemption affects a person's tax situation by:

Accepted Answer

A)  increasing the standard deduction. 
B)  increasing the taxpayer's marginal tax rate. 
C)  decreasing itemized deductions. 
D)  reducing the taxpayer's taxable income. 
E)  increasing tax-exempt income. 
A)  increasing the standard deduction. 
B)  increasing the taxpayer's marginal tax rate. 
C)  decreasing itemized deductions. 
D)  reducing the taxpayer's taxable income. 
E)  increasing tax-exempt income. D

Question 3

Anne had earnings from her salary of $40,000 and a contribution to a registered retirement saving plan of $1,500. Anne's' net income would be

Accepted Answer

A)  $39,250. 
B)  $40,000. 
C)  $39,300. 
D)  $38,500. 
E)  $41,500. 
A)  $39,250. 
B)  $40,000. 
C)  $39,300. 
D)  $38,500. 
E)  $41,500. D

Question 4

Contributing $2,000 to an RRSP changes the Tax Free Savings Account (TFSA) contribution by

Accepted Answer

A)  reducing the limit by $1,000 
B)  reducing the limit by $2,000 
C)  reducing the limit by $3,000 
D)  does not reduce the TFSA contribution limit 
E)  Increases the TFSA limit by $2,000 
A)  reducing the limit by $1,000 
B)  reducing the limit by $2,000 
C)  reducing the limit by $3,000 
D)  does not reduce the TFSA contribution limit 
E)  Increases the TFSA limit by $2,000

Question 5

One of the legitimate methods to reduce one's taxes is tax avoidance

Accepted Answer

A) True 
 B)False

Question 6

An expense that would be included in the deductions of a taxpayer is

Accepted Answer

A)  travel to work. 
B)  life insurance premiums. 
C)  union and professional dues. 
D)  a driver's license fee. 
E)  tuition fees. 
A)  travel to work. 
B)  life insurance premiums. 
C)  union and professional dues. 
D)  a driver's license fee. 
E)  tuition fees.

Question 7

The financial planning objective is to:

Accepted Answer

A)  evade taxes. 
B)  minimize taxes. 
C)  maximize income. 
D)  maximize after-tax cash flows. 
E)  maximize tax credits. 
A)  evade taxes. 
B)  minimize taxes. 
C)  maximize income. 
D)  maximize after-tax cash flows. 
E)  maximize tax credits.

Question 8

What is the benefit of the Home Buyer's Plan?

Accepted Answer

The Home Buyer's Plan allows f

Question 9

A tax credit is an amount subtracted directly from the amount of taxes owed.

Accepted Answer

A) True 
 B)False

Question 10

Most people pay federal income tax by

Accepted Answer

A)  paying the total amount owed by April 15. 
B)  filing quarterly tax payments. 
C)  having amounts withheld from source. 
D)  earning tax credits for various deductions. 
E)  cashing in their saving. 
A)  paying the total amount owed by April 15. 
B)  filing quarterly tax payments. 
C)  having amounts withheld from source. 
D)  earning tax credits for various deductions. 
E)  cashing in their saving.

Question 11

Earnings from a limited partnership would be an example of ____________ income.

Accepted Answer

A)  earned 
B)  investment 
C)  portfolio 
D)  net business income 
E)  excluded 
A)  earned 
B)  investment 
C)  portfolio 
D)  net business income 
E)  excluded

Question 12

Which of the following would result in a reduction of taxable income?

Accepted Answer

A)  portfolio income 
B)  tax credits 
C)  union dues 
D)  business income 
E)  earned income 
A)  portfolio income 
B)  tax credits 
C)  union dues 
D)  business income 
E)  earned income

Question 13

A field audit requires that a taxpayer visit an auditing agent to clarify some aspect of his or her tax return.

Accepted Answer

A) True 
 B)False

Question 14

Several courses of appeal are available to taxpayers who disagree with a revenue service ruling on their tax return audit.

Accepted Answer

A) True 
 B)False

Question 15

Tax Freedom Day occurs:

Accepted Answer

A)  the time in the year when your income has paid the portion of taxes imposed by all levels of government 
B)  there is no Tax Freedom Day 
C)  the time in the year when your income has paid the portion of taxes imposed by the federal government 
D)  the time in the year when your income has paid the portion of taxes imposed by the provincial government 
E)  Any time you do not pay GST or PST 
A)  the time in the year when your income has paid the portion of taxes imposed by all levels of government 
B)  there is no Tax Freedom Day 
C)  the time in the year when your income has paid the portion of taxes imposed by the federal government 
D)  the time in the year when your income has paid the portion of taxes imposed by the provincial government 
E)  Any time you do not pay GST or PST

Question 16

A tax credit of $100 for a person in a 28 percent tax bracket would reduce a person's taxes by

Accepted Answer

A)  $100. 
B)  $28. 
C)  $72. 
D)  $50. 
E)  $35. 
A)  $100. 
B)  $28. 
C)  $72. 
D)  $50. 
E)  $35.

Question 17

Why are capital losses important?

Accepted Answer

They are important because they reduce o

Question 18

Contributions to a Tax Free Savings Account are tax deductible

Accepted Answer

A) True 
 B)False

Question 19

There is a withholding on tax paid to Canadian residents on interest, dividends, rent and royalties.

Accepted Answer

A) True 
 B)False

Question 20

Identify the correct statements 
I. Tax deductions are more valuable to a high income earner than tax credits.
II. RESPs are excellent income splitting vehicles for families with young children.
III. Students can deduct moving expenses when they move back home to take up a summer job.

Accepted Answer

A)  I and II, only 
B)  II and III, only 
C)  I and III, only 
D)  I, II and III 
E)  I only 
A)  I and II, only 
B)  II and III, only 
C)  I and III, only 
D)  I, II and III 
E)  I only

Jack sold $20,000 worth of stocks that were purchased one year ago for $15,000. He is in a 22% tax bracket. Jack's capital gains taxes are:

An exemption affects a person's tax situation by:

Anne had earnings from her salary of $40,000 and a contribution to a registered retirement saving plan of $1,500. Anne's' net income would be

Contributing $2,000 to an RRSP changes the Tax Free Savings Account (TFSA) contribution by

One of the legitimate methods to reduce one's taxes is tax avoidance

An expense that would be included in the deductions of a taxpayer is

The financial planning objective is to:

What is the benefit of the Home Buyer's Plan?

A tax credit is an amount subtracted directly from the amount of taxes owed.

Most people pay federal income tax by

Earnings from a limited partnership would be an example of ____________ income.

Which of the following would result in a reduction of taxable income?

A field audit requires that a taxpayer visit an auditing agent to clarify some aspect of his or her tax return.

Several courses of appeal are available to taxpayers who disagree with a revenue service ruling on their tax return audit.

Tax Freedom Day occurs:

A tax credit of $100 for a person in a 28 percent tax bracket would reduce a person's taxes by

Why are capital losses important?

Contributions to a Tax Free Savings Account are tax deductible

There is a withholding on tax paid to Canadian residents on interest, dividends, rent and royalties.

Identify the correct statements I. Tax deductions are more valuable to a high income earner than tax credits. II. RESPs are excellent income splitting vehicles for families with young children. III. Students can deduct moving expenses when they move back home to take up a summer job.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 3: Planning Your Tax Strategy

Jack sold $20,000 worth of stocks that were purchased one year ago for $15,000. He is in a 22% tax bracket. Jack's capital gains taxes are:

An exemption affects a person's tax situation by:

Anne had earnings from her salary of $40,000 and a contribution to a registered retirement saving plan of $1,500. Anne's' net income would be

Contributing $2,000 to an RRSP changes the Tax Free Savings Account (TFSA) contribution by

One of the legitimate methods to reduce one's taxes is tax avoidance

An expense that would be included in the deductions of a taxpayer is

The financial planning objective is to:

What is the benefit of the Home Buyer's Plan?

A tax credit is an amount subtracted directly from the amount of taxes owed.

Most people pay federal income tax by

Earnings from a limited partnership would be an example of ____________ income.

Which of the following would result in a reduction of taxable income?

A field audit requires that a taxpayer visit an auditing agent to clarify some aspect of his or her tax return.

Several courses of appeal are available to taxpayers who disagree with a revenue service ruling on their tax return audit.

Tax Freedom Day occurs:

A tax credit of $100 for a person in a 28 percent tax bracket would reduce a person's taxes by

Why are capital losses important?

Contributions to a Tax Free Savings Account are tax deductible

There is a withholding on tax paid to Canadian residents on interest, dividends, rent and royalties.

Identify the correct statements I. Tax deductions are more valuable to a high income earner than tax credits. II. RESPs are excellent income splitting vehicles for families with young children. III. Students can deduct moving expenses when they move back home to take up a summer job.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters