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Canadian Income Taxation, 6/e
William Buckwold, University of Victoria
Other Income, Other Deductions, and Special Rules for Completing Net Income for Tax Purposes

Multiple Choice Quiz



1

Which of the following is not a condition for the taxation of maintenance payments received from a former spouse?
A)The payments are received as periodic payments.
B)The payments total more than $10,000 in a year.
C)The payments are made pursuant to a written agreement.
D)The payments are for the maintenance of the former spouse.
2

Which of the following does not correctly describe a condition for the deductibility of moving expenses?
A)Moving expenses are limited to employment income at the new location.
B)The new residence must be at least 40 kilometres closer to the new work location than the previous residence.
C)Moving expenses are deductible if incurred for relocation to commence an employment.
D)Moving expenses are deductible if incurred to attend a university or other post-secondary school.
3

Which of the following types of income should be included in earned income when calculating an individual's RRSP contribution limit?
A)Interest income
B)Dividends income
C)Rental income
D)Capital gains
4

When is it mandatory to convert all of an RRSP's funds to a pension vehicle?
A)By December 31 of the year in which the individual reaches 60.
B)By December 31 of the year in which the individual reaches 65.
C)By December 31 of the year in which the individual reaches 69.
D)By December 31 of the year in which the individual reaches 70.
5

Which of the following rules would apply to a vendor who is not dealing at arm's length with a purchaser?
A)If the property is sold at a price that is more than its fair market value, it is deemed to have been sold at the original cost.
B)If the property is sold at a price that is more than its fair market value, it is deemed to have been sold at fair market value.
C)If the property is sold at a price that is less than its fair market value, it is deemed to have been sold at the total of discounted cash flows.
D)If the property is sold at a price that is less than its fair market value, it is deemed to have been sold at fair market value.
6

A student had income from a RESP for $12,000, a scholarship for $5,000, a prize for achievement in a field of endeavour for $1,500 and a research grant for $5,000 less related expenses of $1,000. What amount should be included in net income as other income?
A)$18,500
B)$19,000
C)$19,500
D)$20,000
7

An individual received monthly payments of $500 as alimony and $1,000 as child maintenance for 2 children from a former spouse pursuant to a court order. She worked earning $25,000 and incurred child care expenses of $7,000 for her 6-year old and $5,000 for her 8-year old. What net amount should be included in net income from these other income and deductions?
A)$(6,000)
B)$(5,000)
C)$7,000
D)$8,000
8

In 20X1, an individual had employment income of $73,000, a rental loss of $5,000 and interest income of $2,000. The employer and employee each made a $2,000 contribution to his money-purchase RPP. What is the employee's RRSP contribution limit for 20X2?
A)$8,240
B)$8,600
C)$9,140
D)$10,240
9

An individual sold two pieces of land with a fair market value of $30,000 each and an original cost of $25,000 each. She sold one to her related corporation for $40,000 and the other to her spouse for $15,000. What amount should she include in determining her net income for tax purposes?
A)$0
B)$2,500
C)$5,000
D)$7,500
10

A manufacturing business owner is considering the sale of the business with assets in inventory, land, building, equipment and goodwill. Which of these assets would he prefer to allocate the greatest price?
A)Inventory
B)Land
C)Equipment
D)Goodwill




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