Fido Wi-Fi 9:08 AM Moodle Chapter 1-4 What are 4 possible controllable variables

Question

Fido Wi-Fi 9:08 AM Moodle Chapter 1-4 What are 4 possible controllable variables that may be considered when tax planning? a) Type of income, type of expense, type of deduction, Employment income, business income, property Type of income, entity structure, jurisdiction, and Tax rate, interest rate, exchange rate, and rate of and type of tax b) income, and capital gains c) timing d) return 2. Which are the 3 entities required to pay income tax? a) Idividual, trust, and corporation b) Proprietorship, partnership, and a corporation c) Individual, partnership, and corporation d) Proprietorship, trust, and limited partnership 3. Bob operates a business as a proprietorship. Last year he earned S56,000. He also had a capital gain of S12,000 and a capital loss of $20,000. He also had rental losses of $4,000. Calculate his net income for tax purposes in accordance with Section 3 a) $52,000 b) $48,000 c) $44,000 d) Nil 4. Francis had a loss on her rental business of $36,000 last year. She earned $23,000 in employment income. She had a capital gain of $32,000. Calculate her net income for tax purposes in accordance with Section 3 a) $(13,000) b) 3,000 c) 16,000 d) S19,000 5. Section 5 describes employment income as made up of:

Explanation / Answer

1 b) Employment income, business income, property income, and capital gains Controllable variables means those which are controlled by taxpayer. 2 b) Proprietorship, partnership and a corporation. Entities means business structures which have a profit motive. 3 a) $52,000 Capital losses are not allowed to be adjusted against any other income. Rental losses can be adjusted against any other income. 4 d) $19,000 Rental losses can be adjusted against any other income. 5 c) Salary, benefits, allowances and deductions 6 d) 66,960 Group health care plan, Christmas gift, travel allowance, reimbursement of course are not taxable benefits from employer. Professional fees is a deductible expenses. 7 a) $5,868 8 b) When option is granted = Employment Income $0 When the option is exercised= Employment income $500 When the shares are sold= Taxable Capital Gains $750 At the time of exercise, taable benefit will be difference between exercise price and market value. There is a 1/2 tax deduction on Capital gains at the time of sale of shares. 9 d) $15,225 10 b) 760

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