CANADIAN TAX PRINCIPLES CHAPTER 4 ELITE
REVIEW COMPREHENSIVE STUDY PAPER WITH
VERIFIED SOLUTIONS
◉The all-inclusive concept means that ___________ ______________
generally includes all realized income from whatever source derived. .
Answer: gross income
◉Match the type or character of income to its definition. . Answer: Tax-
exempt- Income realized during the year that is excluded from gross
income and never taxed
Tax-deferred- Income realized during the year that is not included in
gross income until a later year
Ordinary- Income included in gross income in the current year and taxed
at the ordinary rates per the tax rate schedules
Capital- Gains (or losses) on investment or personal use assets that may
be taxed at favorable rates
◉Some tax deductions are subtracted _____________ AGI and some are
subtracted ______________ AGI. . Answer: from, for
◉For AGI deductions are preferable to from AGI deductions. (T/F) .
Answer: true
,◉Zack is single and has collected the following information for
preparing his 2023 taxes: Gross income $74,000, tax credits $2,500,
itemized deductions $10,500, deductions for AGI $5,000, tax
prepayments $8,400. Based on this information, Zack's "adjusted gross
income" equals $__, and his "taxable income" equals $__.
Multiple choice question.
adjusted gross income = $61,000 and taxable income = $47,150
adjusted gross income = $63,100 and taxable income = $49,250
adjusted gross income = $69,000 and taxable income = $55,150
adjusted gross income = $66,500 and taxable income = $53,550 .
Answer: adjusted gross income = $69,000 and taxable income = $55,150
◉For tax years beginning in 2018, a taxpayer's from AGI deductions
include the greater of the standard deduction or the taxpayer's
________________ deductions and 20% of the taxpayer's qualified
______________ income. . Answer: itemized, business
◉The U.S. tax laws are based on the all-inclusive concept where gross
income includes all realized income from "whatever _______________
________________." . Answer: source derived
◉What is meant by the all-inclusive concept when referring to the U.S.
tax laws?
Multiple choice question.
, Gross income includes all realized income from whatever source
derived.
Gross income includes all increases in wealth, regardless of whether the
income has been realized during the year.
Gross income includes all cash received from any source. . Answer:
Gross income includes all realized income from whatever source
derived.
◉In 2023, Ryan files as single and has taxable income of $47,153. None
of his taxable income consists of capital gains or qualified dividends.
His tax liability rounded to the nearest dollar totals $
________________ (use the tax rate schedules) . Answer: 5681
◉olanda is your client. With her current level of taxable income, she is
paying tax at 24% marginal rate. She received $2,000 in qualified
dividends this year. What rate of tax do you expect that Yolanda will pay
on her dividends?
Multiple choice question.
15%
0%
24%
20% . Answer: 15%
◉In addition to the individual income tax, individuals may be required
to pay other taxes. Owners of unincorporated businesses may have to
REVIEW COMPREHENSIVE STUDY PAPER WITH
VERIFIED SOLUTIONS
◉The all-inclusive concept means that ___________ ______________
generally includes all realized income from whatever source derived. .
Answer: gross income
◉Match the type or character of income to its definition. . Answer: Tax-
exempt- Income realized during the year that is excluded from gross
income and never taxed
Tax-deferred- Income realized during the year that is not included in
gross income until a later year
Ordinary- Income included in gross income in the current year and taxed
at the ordinary rates per the tax rate schedules
Capital- Gains (or losses) on investment or personal use assets that may
be taxed at favorable rates
◉Some tax deductions are subtracted _____________ AGI and some are
subtracted ______________ AGI. . Answer: from, for
◉For AGI deductions are preferable to from AGI deductions. (T/F) .
Answer: true
,◉Zack is single and has collected the following information for
preparing his 2023 taxes: Gross income $74,000, tax credits $2,500,
itemized deductions $10,500, deductions for AGI $5,000, tax
prepayments $8,400. Based on this information, Zack's "adjusted gross
income" equals $__, and his "taxable income" equals $__.
Multiple choice question.
adjusted gross income = $61,000 and taxable income = $47,150
adjusted gross income = $63,100 and taxable income = $49,250
adjusted gross income = $69,000 and taxable income = $55,150
adjusted gross income = $66,500 and taxable income = $53,550 .
Answer: adjusted gross income = $69,000 and taxable income = $55,150
◉For tax years beginning in 2018, a taxpayer's from AGI deductions
include the greater of the standard deduction or the taxpayer's
________________ deductions and 20% of the taxpayer's qualified
______________ income. . Answer: itemized, business
◉The U.S. tax laws are based on the all-inclusive concept where gross
income includes all realized income from "whatever _______________
________________." . Answer: source derived
◉What is meant by the all-inclusive concept when referring to the U.S.
tax laws?
Multiple choice question.
, Gross income includes all realized income from whatever source
derived.
Gross income includes all increases in wealth, regardless of whether the
income has been realized during the year.
Gross income includes all cash received from any source. . Answer:
Gross income includes all realized income from whatever source
derived.
◉In 2023, Ryan files as single and has taxable income of $47,153. None
of his taxable income consists of capital gains or qualified dividends.
His tax liability rounded to the nearest dollar totals $
________________ (use the tax rate schedules) . Answer: 5681
◉olanda is your client. With her current level of taxable income, she is
paying tax at 24% marginal rate. She received $2,000 in qualified
dividends this year. What rate of tax do you expect that Yolanda will pay
on her dividends?
Multiple choice question.
15%
0%
24%
20% . Answer: 15%
◉In addition to the individual income tax, individuals may be required
to pay other taxes. Owners of unincorporated businesses may have to
