Introduction to Federal Income Taxation in Canada 43rd Edition 2022-2023

Edition by Nathalie Johnstone , Devan Mescall , Julie Robson Test bank Sample

25) An auditor reviewing French Corporation discovered that $100,000 of corporate revenue was being deliberately recorded in the books as a debit to Bank and a credit to shareholders loan.

Which of the following statements is true?

(a) This transaction is an example of tax planning.

(b) This transaction is an example of tax avoidance.

(c) This transaction is an example of tax evasion.

(d) This transaction does not fit any the above categories.

26) Western Corporation and Eastern Corporation are both owned by the same sole shareholder. An auditor reviewing Western Corporation discovers that the sole shareholder took steps to direct income earned by Eastern Corporation to Western Corporation to prevent losses from expiring in Western Corporation.

Which of the following statements is true:

(a) This transaction is an example of tax planning.

(b) This transaction is an example of tax avoidance.

(c) This transaction is an example of tax evasion.

(d) This transaction does not fit any the above categories.

27) An auditor reviewing Mary's personal tax return sees that she purchased an RRSP to lower her personal taxes.

Which of the following statements is true:

(a) This transaction is an example of tax planning.

(b) This transaction is an example of tax avoidance.

(c) This transaction is an example of tax evasion.

(d) This transaction does not fit any the above categories.

28) Francis moved to Canada from India on April 30 20, 2022. Which of the following accurately describes Frank's tax status for 2022?

(a) Francis will be taxed in Canada on all her worldwide income earned in 2022 because the time she spent in Canada exceeds 183 days.

(b) Franciswill be taxed in Canada on all her worldwide income earned in 2022, multiplied by the number of days spent in Canada and divided by 365.

(c) Francis will be taxed in Canada on all her worldwide income earned from April 30, 2022 to December 31, 2022, except for gains or losses on the sale of capital property owned prior to entering Canada.

(d) Francis will be taxed in Canada on all his worldwide income earned from Aprl 30 20, 2022 to December 31, 2022.