Question 1

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.F) B) and D)
G) All of the above

Question 2

What is the least common type of tax filing error, of those listed?

Accepted Answer

A)  Mathematical errors, such as adding or subtracting amounts incorrectly.
B)  Calculating and claiming provincial tax credits incorrectly.
C)  Claiming GST/HST credits incorrectly by using incorrect spousal income amounts.
D)  Claiming incorrect amounts as RRSP contributions.
E)  Forgetting to claim the age amount, or claiming it incorrectly.F) B) and D)
G) A) and B)

Question 3

Sheira Harvey worked in Poland for part of the year and earned $50,000 while she was there.This income will not be included in her income for the year.This represents:

Accepted Answer

A)  A deduction
B)  An exclusion
C)  An exemption
D)  A tax credit
E)  An increase of incomeF) D) and E)
G) B) and C)

Question 4

What is the maximum percentage of last year's earned income that can be contributed to an RRSP?

Accepted Answer

A)  15%
B)  18.
C)  45%
D)  50%
E)  60%F) A) and D)
G) None of the above

Question 5

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

Accepted Answer

A)  earned
B)  investment
C)  portfolio
D)  net business income
E)  excludedF) C) and D)
G) B) and E)

Question 6

An example of a non-refundable tax credit is

Accepted Answer

A)  interest on a credit card or charge account.
B)  certain job-related travel expenses.
C)  the cost of commuting to work.
D)  life insurance premiums.
E)  student loan interest fees.F) A) and B)
G) B) and D)

Question 7

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Accepted Answer

A) True 
 B)False

Question 8

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.F) None of the above
G) A) and B)

Question 9

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.F) B) and D)
G) A) and D)

Question 10

Real-estate property taxes are significant but not a major source of revenue for local governments.

Accepted Answer

A) True 
 B)False

Question 11

The principal purpose of taxes is to control economic conditions.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  credit
B)  exemption
C)  deduction
D)  exclusion
E)  shelterF) C) and D)
G) D) and E)

Question 13

What is step 3 in computing taxable income and your tax liability?

Accepted Answer

A)  Determine total income
B)  Calculate net income
C)  Calculating taxable income
D)  Calculate federal taxes owing
E)  Calculating Net Federal TaxesF) A) and B)
G) B) and D)

Question 14

In 2009, Glenn is allowed to contribute $5,000 to a TFSA.He contributes $2,000 for that year.If he withdraws $1,000 the same year from the TFSA account, the following year:

Accepted Answer

A)  $3,000 contribution room is added to the 2010 TFSA limit
B)  the TFSA limit for 2010 is unchanged
C)  the TFSA limit for 2010 is reduced by $1,000
D)  $4,000 contribution room is added to the 2010 TFSA limit
E)  $1,000 is added to taxable income for 2010F) A) and B)
G) C) and D)

Question 15

Capital gains refer to

Accepted Answer

A)  tax-exempt investments.
B)  profits from the sale of an investment asset.
C)  gains from the sale of capital assets
D)  earnings from investments such as dividends or interest.
E)  tax-deferred investments.F) B) and C)
G) A) and E)

Question 16

There is no significant difference between a federal tax credit and a federal tax deduction.

Accepted Answer

A) True 
 B)False

Question 17

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 PSTF) None of the above
G) A) and D)

Question 18

Income from a partnership is included under net business income.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Exam 3: Planning Your Tax Strategy

There is no significant difference between a federal tax credit and a federal tax deduction.

Correct Answer
verified

The principal purpose of taxes is to control economic conditions.

Correct Answer
verified

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

Correct Answer
verified

What is step 3 in computing taxable income and your tax liability?

Correct Answer
verified

Tax Freedom Day occurs:

Correct Answer
verified

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

Correct Answer
verified

The financial planning objective is to:

Correct Answer
verified

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Correct Answer
verified

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

Correct Answer
verified

In 2009, Glenn is allowed to contribute $5,000 to a TFSA.He contributes $2,000 for that year.If he withdraws $1,000 the same year from the TFSA account, the following year:

Correct Answer
verified

Capital gains refer to

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Income from a partnership is included under net business income.

Correct Answer
verified

What is the least common type of tax filing error, of those listed?

Correct Answer
verified

What is the maximum percentage of last year's earned income that can be contributed to an RRSP?

Correct Answer
verified

An example of a non-refundable tax credit is

Correct Answer
verified

Real-estate property taxes are significant but not a major source of revenue for local governments.

Correct Answer
verified

Sheira Harvey worked in Poland for part of the year and earned $50,000 while she was there.This income will not be included in her income for the year.This represents:

Correct Answer
verified

Exam 3: Planning Your Tax Strategy

There is no significant difference between a federal tax credit and a federal tax deduction.

Correct AnswerverifiedShow Answer

The principal purpose of taxes is to control economic conditions.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is step 3 in computing taxable income and your tax liability?

Correct AnswerverifiedShow Answer

Tax Freedom Day occurs:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The financial planning objective is to:

Correct AnswerverifiedShow Answer

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In 2009, Glenn is allowed to contribute $5,000 to a TFSA.He contributes $2,000 for that year.If he withdraws $1,000 the same year from the TFSA account, the following year:

Correct AnswerverifiedShow Answer

Capital gains refer to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Income from a partnership is included under net business income.

Correct AnswerverifiedShow Answer

What is the least common type of tax filing error, of those listed?

Correct AnswerverifiedShow Answer

What is the maximum percentage of last year's earned income that can be contributed to an RRSP?

Correct AnswerverifiedShow Answer

An example of a non-refundable tax credit is

Correct AnswerverifiedShow Answer

Real-estate property taxes are significant but not a major source of revenue for local governments.

Correct AnswerverifiedShow Answer

Sheira Harvey worked in Poland for part of the year and earned $50,000 while she was there.This income will not be included in her income for the year.This represents:

Correct AnswerverifiedShow Answer

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