Solutions Manual for Canadian Income Taxation 25th Edition
by William Buckwold
________ involves structuring transactions to reduce the tax liability of the taxpayer
consistent with the intent of the income tax legislation. - ANSWER: Tax Planning
Carl works for Sam. Sam pays Carl entirely in cash and does not issue any tax
reporting documents to Carl, although both know they are supposed to submit
reporting documentation. Carl does not file an income tax return. Carl and Sam are
engaging in ________. - ANSWER: Tax Evasion
A transaction (or series of transactions) that results in a tax benefit and has no other
bona fide purpose is ________. - ANSWER: An avoidance transaction
The largest single source of revenue for the Canadian government is ________. -
ANSWER: Personal income tax
Which of the following taxes combines both federal and provincial sales taxes into a
tax levy? - ANSWER: Harmonized Sales tax (HST)
Which of the following elements, within the organization and structure of the
Income Tax Act, refers to a subparagraph of the Income Tax Act? - ANSWER:
lowercase Roman numeral in parentheses
Canadian individual income tax is an example of a(n) ________ tax system. -
ANSWER: progressive
The primary purpose for the federal government to collect tax revenues is to
________. - ANSWER: provide public goods and services
Which of the following taxes is inherently a regressive tax system? - ANSWER: Sales
tax
Consider the following scenario.
Linda
has taxable income of
$400,000
and income taxes payable of
$60,000.
Nancy
has taxable income of
$55,000
and taxes payable of
$8,250.
, This scenario represents which type of tax system? - ANSWER: flat
Income Tax Regulations ________. - ANSWER: are established to provide specific
details and procedural requirements necessary to enforce the Income Tax Act
Administrative or informative guides that can assist with filing an individual income
tax return can be found ________. - ANSWER: on CRA websites
CRA publications can best be described as ________. - ANSWER: helpful
interpretations of how the Income Tax Act applies to real-life scenarios; however,
these interpretations do not have the force of law
If a Canadian taxpayer is unsure of the income tax consequences of a proposed
transaction, he or she may choose to pay a fee for the CRA to issue a(n) ________. -
ANSWER: Advance Income Tax Ruling
Section 3 of the Income Tax Act describes: - ANSWER: the liability for income tax for
non-residents earning Canadian income
A Taxable Capital Gain is defined as: - ANSWER: 50% of a Capital Gain realized in a
taxation year
When the Income Tax Act refers to a person, it refers to ________. - ANSWER: an
individual person, corporation, or a trust
If a Canadian citizen is subject to taxes as a resident of Canada and as a resident in
another country, most often _______________. - ANSWER: international tax treaties
will determine the individual's residency
Whether an individual is a resident or non-resident for Canadian tax purposes
________. - ANSWER: is not easily determined for all individuals
Sam is an individual who is a Canadian citizen. On July 1 of the current year, Sam
moves to Mexico. He sells his Canadian home, drives his car to Mexico, rents an
apartment in Mexico City, and commences employment in Mexico. Sam is single and
does not have any dependents or a spouse, and at the time he leaves Canada, he
does not have any intent to return to Canada to live. What type of Canadian
taxpayer will Sam be for the current year? - ANSWER: part-year/part-time resident
Regarding the taxation of non-residents in Canada, ________. - ANSWER: non-
residents are subject to tax on certain sources of income earned in Canada
David is a French citizen who comes to Canada to attend a Canadian university. He
also works part time during his stay in Canada. He arrives in Canada on May 1 of the
current year and departs to return to France on February 1 of the following year.
David never intended to stay in Canada permanently and is treated as a resident of
by William Buckwold
________ involves structuring transactions to reduce the tax liability of the taxpayer
consistent with the intent of the income tax legislation. - ANSWER: Tax Planning
Carl works for Sam. Sam pays Carl entirely in cash and does not issue any tax
reporting documents to Carl, although both know they are supposed to submit
reporting documentation. Carl does not file an income tax return. Carl and Sam are
engaging in ________. - ANSWER: Tax Evasion
A transaction (or series of transactions) that results in a tax benefit and has no other
bona fide purpose is ________. - ANSWER: An avoidance transaction
The largest single source of revenue for the Canadian government is ________. -
ANSWER: Personal income tax
Which of the following taxes combines both federal and provincial sales taxes into a
tax levy? - ANSWER: Harmonized Sales tax (HST)
Which of the following elements, within the organization and structure of the
Income Tax Act, refers to a subparagraph of the Income Tax Act? - ANSWER:
lowercase Roman numeral in parentheses
Canadian individual income tax is an example of a(n) ________ tax system. -
ANSWER: progressive
The primary purpose for the federal government to collect tax revenues is to
________. - ANSWER: provide public goods and services
Which of the following taxes is inherently a regressive tax system? - ANSWER: Sales
tax
Consider the following scenario.
Linda
has taxable income of
$400,000
and income taxes payable of
$60,000.
Nancy
has taxable income of
$55,000
and taxes payable of
$8,250.
, This scenario represents which type of tax system? - ANSWER: flat
Income Tax Regulations ________. - ANSWER: are established to provide specific
details and procedural requirements necessary to enforce the Income Tax Act
Administrative or informative guides that can assist with filing an individual income
tax return can be found ________. - ANSWER: on CRA websites
CRA publications can best be described as ________. - ANSWER: helpful
interpretations of how the Income Tax Act applies to real-life scenarios; however,
these interpretations do not have the force of law
If a Canadian taxpayer is unsure of the income tax consequences of a proposed
transaction, he or she may choose to pay a fee for the CRA to issue a(n) ________. -
ANSWER: Advance Income Tax Ruling
Section 3 of the Income Tax Act describes: - ANSWER: the liability for income tax for
non-residents earning Canadian income
A Taxable Capital Gain is defined as: - ANSWER: 50% of a Capital Gain realized in a
taxation year
When the Income Tax Act refers to a person, it refers to ________. - ANSWER: an
individual person, corporation, or a trust
If a Canadian citizen is subject to taxes as a resident of Canada and as a resident in
another country, most often _______________. - ANSWER: international tax treaties
will determine the individual's residency
Whether an individual is a resident or non-resident for Canadian tax purposes
________. - ANSWER: is not easily determined for all individuals
Sam is an individual who is a Canadian citizen. On July 1 of the current year, Sam
moves to Mexico. He sells his Canadian home, drives his car to Mexico, rents an
apartment in Mexico City, and commences employment in Mexico. Sam is single and
does not have any dependents or a spouse, and at the time he leaves Canada, he
does not have any intent to return to Canada to live. What type of Canadian
taxpayer will Sam be for the current year? - ANSWER: part-year/part-time resident
Regarding the taxation of non-residents in Canada, ________. - ANSWER: non-
residents are subject to tax on certain sources of income earned in Canada
David is a French citizen who comes to Canada to attend a Canadian university. He
also works part time during his stay in Canada. He arrives in Canada on May 1 of the
current year and departs to return to France on February 1 of the following year.
David never intended to stay in Canada permanently and is treated as a resident of
