ACCT226 True False Question and Answer Chapter 4 PDF

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Summary

Worker’s compensation payments received are not included in an individual’s Net Income For Tax Purposes. True Or False? Provincial income taxes are calculated as a percent of federal Tax Payable. True Or False? All federal tax credits are calculated by multiplying the lowest federal income tax brack...

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1. Worker’s compensation payments received are not included in an individual’s Net Income For Tax Purposes. True Or False?

2.

Provincial income taxes are calculated as a percent of federal Tax Payable. True Or False?

3. All federal tax credits are calculated by multiplying the lowest federal income tax bracket rate by an indexed base figure. True Or False?

4. A person claiming the ITA 118(1)(b) tax credit that is available to an eligible individual supporting a related dependant in a self-contained domestic establishment can claim the credit for their child, even if the child is not a resident of Canada. True Or False?

5. An individual cannot claim the pension income credit if their only income is from the Canada Pension Plan. True Or False?

6. If both spouses have medical expenses, it will usually be to their advantage for one of the spouses to claim the credit on the basis of their combined medical expenses. True Or False?

7.

There is no limit on the amount of the tuition credit that can be transferred to a spouse. True Or False?

8. Sharon Jarvis contributed $500 to the Federal Liberal Party. She is eligible for a federal political contributions tax credit of $500. True Or False?

9. The federal political contributions tax credit is deductible in computing Taxable Income, but cannot create a Taxable Loss. True Or False?

10. The refundable medical expense supplement is available to any individual who is 18 years of age or older. True Or False?

11.

The clawback of OAS payments will not alter the individual’s Net Income For Tax Purposes. True Or False?

1.

False. They are included in Net Income For Tax Purposes and deducted in the determination of Taxable Income.

2.

False. Provincial income taxes are calculated as a percent of Taxable Income.

3.

False. Not all of the base figures are indexed (e.g., the pension income credit base) and the charitable donations credit can be at 29 or 33 percent.

4.

True. While the credit is usually only available for a resident related dependant, an exception is made for the child of an individual.

5.

True. ITA 118(8) specifically excludes Canada Pension Plan payments from eligibility for this credit.

6.

True. This will avoid double counting the 3 percent of income limit.

7.

False. The combined transfer is limited to $5,000 multiplied by the appropriate percentage.

8.

False. She is eligible for a federal political contributions tax credit of $350 [(3/4)($400) + (1/2) ($100)].

9.

False. The federal political contributions tax credit is deductible against federal Tax Payable.

10. False. In addition to the age requirement, there is a minimum earned income requirement.

11. False. Any required repayment of OAS payments can be deducted in the determination of Net Income For Tax Purposes....