Question

12.

before applying the corporate tax rate, firms may deduct

a. wage payments

b. dividend payments to shareholders

c. depreciation allowances

d. a and c

13.

in canada, only realized capital gains are included in taxable income

a. true

b. false

c. uncertain

14.

consider the following statement. the best empirical evidence to date suggests the tax subsidies for certain accounts like RRSPs and the TFSAs encourages new savings. is this statement true or false, explain

16.

in the canadian PIT system, capital gains are

a. generally not associated with a "lock in effect"

b. treated exactly like the other sources of income

c. taxed differently than other sources of income

d. only realized death

dont need explanation besides number 14, thanks

Answer 1

12. (b), before applying the corporate tax rate, firms may deduct dividend Because dividends represent a portion of net income, they are considered taxable as company income and higher dividend tax rates for individuals.

13. True:

In Canada capital gains are included in taxable income with 50 % rate of taxes. The genesis of our capital gains tax began with the Carter commission report which led to the major tax reform of 1971 with the result that capital gains became taxable from January 1, 1972. Before that ther the capital gains were exempted in Canada.

14. False:

financial institutions campaign to encourage people to open TFSA high interest savings accounts, this but is not the only option. These high saving are misconceptions that comes from the name of the product as a tax-free savings account but ultimately inefficient.

Generally, these a TFSA are opened through discount broker where people invest in GIC, stock bonds, min, mutual funds and exchanges. Negotiated Fund (ETF). Unlike RRSP, TFSA account is not a type of investment product, it is an account with special tax assets registered with CRA. RRSP, a TFSA account is not a type of investment product, it’s an account with specific tax properties that’s registered with the CRA

16. (C), taxed differently than other sources on income. As the percent rate share are different in case of capital gains with different caps.