Question

All of the following statements are true, except:

a.

Canadian residents must report their worldwide income for tax purposes.

b.

If an individual is a resident of Canada for part of the calendar year, that individual only has to report his worldwide income during the period of residency for Canadian tax purposes.

c.

An individual who immigrates to Canada during the year is a resident of Canada for tax purposes for the full calendar year.

d.

An individual can be a resident of Canada for tax purposes, even if she is not a Canadian citizen.

Ms. Floot has been out of Canada for several years. She is presumed to be a non-resident as long as certain tests are met. Indicate the condition that does NOT have to be met.

a.

She did not leave personal property or social ties in Canada.

b.

She does not return to Canada on a regular or frequent basis.

c.

She did not leave a spouse or other dependants in Canada.

d.

She did not leave taxable Canadian property in Canada.

Anthony, his wife and two kids are all Canadian citizens. For the last three years he and his family have been living in Italy while he works for the Italian subsidiary of a Canadian company. Anthony still owns his house in Canada. His wife and kids stay there for three months in the summer and he spends two month a year there. The rest of the time the house is empty as his wife visits family in Canada regularly. Anthony has no plans to return to Canada and loves living in Italy. However, since his father is old, it is possible that his wife will have to return to Canada for at least five months to nurse his father. Which of the following statements is correct?

a.

If Anthony’s wife returns alone to Canada to care for his father, Anthony is considered a part-time resident of Canada for the five months she is in Canada.

b.

Anthony is considered a non-resident of Canada.

c.

Since Anthony owns a house in Canada that is not rented out under a long-term lease, he is considered a Canadian resident for income tax purposes.

d.

Anthony is considered a part-time resident of Canada for the two months he spends in Canada.

Clear my choice

In which one of the following lists are ALL items relevant when computing net employment income?

a.

Free meals in employer’s facilities; life insurance paid by the employer; legal fees incurred to collect unpaid salary.

b.

Monthly travel allowance; dental plan paid for by the employer; promotional cost incurred in selling the employer’s products.

c.

Employee contributions to a registered pension plan; bonus received; use of an employer-owned automobile.

d.

Medical insurance paid by the employer; exercise of options to purchase shares of the publicly traded employer and tips

Answer 1

1. b) If an individual is a resident of Canada for part of the calendar year, that individual only has to report his worldwide income during the period of residency for Canadian tax purposes.

When an individual lives in Canada for 183 days or more, he/she is considered a resident and will have to report worldwide income for the entire year.

2.b) She does not return to Canada on a regular or frequent basis.

For one to become a Canadian non- resident one has to BREAK entire primary ties which includes-

(1) A personal residence in Canada, which can be either rented or owned by you
(2) A spouse or common law partner living in Canada
(3) Dependents living in Canada

3. c) Since Anthony owns a house in Canada that is not rented out under a long-term lease, he is considered a Canadian resident for income tax purposes.

4. C)Employee contributions to a registered pension plan; bonus received; use of an employer-owned automobile.