1.
Question 1
Which of the following forms of taxation provides the largest component of federal
government taxation revenues?
Personal income tax
Corporate income tax
Goods and services tax
Employment insurance premiums
2. Question 2
Which of the following groups of entities are all subject to taxation on income?
Individuals, proprietorships and corporations
Proprietorships, corporations and trusts
Individuals, trusts and corporations
Individuals, partnerships and corporations
3. Question 3
Which of the following types of taxes is not currently in use by the federal
government of Canada?
Commodity Tax
Tariff Tax
Head Tax
Land Transfer Tax
4. Question 4
Which of the following can be considered an advantage of an income tax system
based on progressive rates?
A progressive rate system is simpler to administer.
A progressive rate system provides greater stability in the context of changing
economic conditions.
A progressive system discourages tax evasion.
A progressive system encourages greater effort on the part of individuals.
5. Question 5
Which of the following statements accurately describes a regressive tax?
A tax which results in higher effective tax rates for higher income taxpayers.
A tax which results in lower effective tax rates for higher income taxpayers.
A tax in which the same effective rate applies to all levels of income.
A tax that is shifted to consumers through price increases on the goods purchased.
6. Question 6
An individual is liable for income tax in Canada if he:
is a resident in Canada.
is a citizen of Canada.
has lived in Canada at any time during the year.
All of the above are required.
7. Question 7
Which of the following persons is NOT liable for Canadian income tax under Part I of
the Income Tax Act?
Mr. X, an individual who has resided in Canada for the past 15 years.
ABC Incorporated, a Canadian resident corporation.
Mrs. Smith, a resident of the United States who earns employment income in
Canada.
Ms. Phillips, a resident of the United States who earns interest income in Canada.
8. Question 8
Mr. A was born in Canada and has lived in Canada all of his life. On November 1st of
the current year, he was transferred by his employer to Brussels, Belgium. There is
no plan for him to return to Canada in the foreseeable future. He is not married and
has no children. For the current year, Mr. A's Canadian residence status for tax
purposes is most accurately described as:
non-resident
resident by virtue of common law
deemed resident
part-year resident
9. Question 9
Mrs. Bee was born in Florence, Italy. She was married for several years to Mr. Cea
and resided with him in the family home in Waterloo, Ontario, Canada. Three years
ago, Mrs. Bee and Mr. Cee were divorced and she moved back to Florence at that
time, where she continues to reside and own a home. During the current year, Mrs.
Bee spent the full months of February through April and the full months of August
through November in Canada, assisting a friend of hers who was ill. She resided at
the friend's home during her time in Canada. Mrs. Bee's Canadian residence status
for tax purposes, under the provisions of the Income Tax Act, for the current year is
most accurately described as:
non-resident
resident by virtue of common law
deemed resident
part-year resident
10.Question 10
Jay ceased to be a resident of Canada on April 30 of the year and moved to New
Zealand on that date. During the first four months of the year, he earned $25,000 of
employment income in Canada and $1,000 of interest income from his bank
accounts in Canada. While living in New Zealand during the remainder of the year,
he earned $30,000 (Cdn. $) of employment income in New Zealand and received
$2,000 of interest income from his Canadian bank accounts. What amount of
taxable income must Jay report on his Canadian personal income tax return for the
year?
$58,000
$56,000
$26,000
Nil
