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Canadian Income Taxation, 6/e
William Buckwold, University of Victoria
Fundamentals of Tax Planning

Multiple Choice Quiz



1

Which of the following is not a category of tax planning opportunities?
A)Converting income to another type.
B)Moving income to another jurisdiction.
C)Shifting income to another time period.
D)Transferring income to another entity.
2

When analyzing alternative courses of action with future cash flows, which of the following factors would have the highest degree of certainty.
A)Future tax rates or income levels that will cause those rates.
B)Appropriate discount rate for time value of money.
C)Discretionary opportunities within the tax system.
D)Expected growth rates of asset values.
3

Which of the following is not a skill in implementing tax planning activities?
A)Ability to understand fundamentals of the tax system.
B)Ability to anticipate entire cycle of an investment from beginning to end.
C)Ability to recognize tax implications along with common sense and good business judgment.
D)Ability to recognize the correct method in achieving a particular goal.
4

Which of the following is not a factor in reviewing cash flows?
A)Who was it received from.
B)How much is coming in.
C)How much is going out.
D)When is it coming in.
5

Which of the following statements correctly describes the anti-avoidance rules included in the Income Tax Act?
A)The key to understanding the anti-avoidance rules lies in establishing whether a transaction results in a tax benefit.
B)In order for a transaction to be considered an avoidance transaction, its primary objective must be other than to obtain a tax benefit.
C)A transaction will not be an avoidance transaction if the taxpayer establishes that it is undertaken primarily for bona fide tax purposes.
D)When person is involved in an avoidance transaction, tax will be adjusted to deny the tax benefit that would have resulted from the transaction(s).




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