Question

Last year, Elizabeth received the following in different forms of income:

• Salary was $90,000
• Interest payments from her bond mutual funds was $3,000
• Dividend payments from her equity mutual funds was $4,500
• Capital gains from selling some of her shares in Bell Canada Enterprises Ltd was $2,500

The combined federal and provincial tax rates in the province she lives in is 31 percent. For dividends, the Gross up amount is 24 percent, federal dividend tax credit is 14 percent, and the provincial dividend tax credit is 4.5 percent

Question 5 (1 point)

What is the amount of taxes she would pay on her capital gains income?

Question 5 options:

$775.85

$387.50

$697.50

$465.00

$5,445

$6,750

None of the Above

What is Dividend Gross Up amount on her dividend income? (1 mark)

Question 6 options:

	$5,580
	$5,895
	$5,445
	$6,750
	None of the Above

Question 7 (1 point)

What would be the tax on the Dividend Gross Up amount? (1 Mark)

Question 7 options:

$1,827.45

$1,729.80

$1,687.95

$2,092.50

None of the Above

Question 8 (1 point)

What would be the federal dividend tax credit amount? (1 mark)

Question 8 options:

$825.30

$762.30

$781.20

$697.50

None of the Above

Question 9 (1 point)

What would be the provincial dividend tax credit amount? (1 mark)

Question 9 options:

$251.10

$303.75

$245.03

$265.28

None of the Above

Question 10 (1 point)

What would the amount of taxes she would pay on her dividend income? (1 mark)

Question 10 options:

$697.50

$762.30

$781.20

$825.30

None of the Above

Question 11 (1 point)

What is the total amount of taxes would she be paying on her total taxable income? (1 mark)

Question 11 options:

$31,000

$27,900

$29,915

$28,925

None of the Above

Question 12 (1 point)

What is the average effective tax rate would Elizabeth be paying on her total taxable income? (1 mark)

Question 12 options:

31.0%

29.9%

23.5%

28.8%

None of the Above

Answer 1

Questions	Calculations	Answer
5	No capital gain	None of the above
6	(4500*(1+31%))	$                     5,895.00
7	=5895*31%	$                     1,827.45
8	=5895*14%	$                         825.30
9	=5895*4.5%	$                         265.28
10	No dividend tax	None of the above
11	Total tax payment is	$                   31,000.00
12	Tax	31%
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