Pedro owns units of a balanced fund in a non-registered account. He receives a distribution from the mutual fund as follows: $10 of capital gains, $5 of Canadian dividends, $8 of interest income $2 of foreign income. Which of the following statements rega

Pedro owns units of a balanced fund in a non-registered account. He receives a distribution from the mutual fund as follows: $10 of capital gains, $5 of Canadian dividends, $8 of interest income $2 of foreign income. Which of the following statements regarding his distribution is correct?

Only 50% of his foreign income needs to be reported on his tax return.

There is a tax credit available for his Canadian dividend income.

Because his mutual fund is held in a non-registered account, the income generated is sheltered from tax.

He only needs to include the capital gains on his tax return.

Angie Wichniewicz is an interior designer. Following are the details of her income: Salary $46,000 Dividends $600 Capital gains $5,000. Deduction: RRSP contribution $5,800 What is Angie’s taxable income assuming a federal dividend gross-up rate of 138%?

$43,300

$43,528

$45,800

$51,600

What portion of a person's total income is used to calculate federal tax before tax credits?

Total income

Net income

Gross income

Taxable income

What is the tax treatment of dividends and interest income from foreign sources?

Dividend income qualifies for the federal dividend tax credit

Only 50% of interest income is included in total income

Interest and dividend income qualify for the special foreign tax rate

Interest and dividends are fully taxable at the individual's marginal tax rate

Monica is curious about the different types of accounts. She wants to know how each is treated for tax purposes. What can you tell her?

Contributions to a tax-free savings account (TFSA) are tax deductible for the contributor.

Income earned in a registered education savings plan (RESP) is taxable on a yearly basis.

Withdrawals from a registered retirement income fund (RRIF) are tax-free.

Contributions to a registered retirement savings plan (RRSP) are tax deductible for the contributor.

Constance has very little income this year because she is on a sabbatical. She owes $250 in taxes but has a non-refundable tax credit of $500 available to her. Which of the following is most likely to occur?

She will receive a tax refund of $250.

She will now owe $750 in taxes.

The non-refundable tax credit reduces her tax payable to $0.

She cannot take advantage of the tax credit since it exceeds her tax payable.

Which of the following is not available for distribution from a mutual fund?

Capital gains

Interest income

Foreign income

Capital losses

Unlock and Upgrade

Remove all limits from your Quizzes

More Quizzes