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Homework answers / question archive / Humber College - BMGT 203 chapter 2 1)In which of the following situations would an individual file a tax? return, even though it is not? required? Choose the correct answer

Humber College - BMGT 203 chapter 2 1)In which of the following situations would an individual file a tax? return, even though it is not? required? Choose the correct answer

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Humber College - BMGT 203

chapter 2

1)In which of the following situations would an individual file a tax? return, even though it is not? required?

Choose the correct answer.

A.

The individual is due a refund of income taxes of? $1,200 for the year.

B.

The individual owes income tax of? $1,200 for the year.

C.

The individual disposed of a capital property at a loss during the year.

D.

The individual is a? non-resident of Canada with a taxable capital gain during the year.

 

2. he standard filing due date for the income tax return of a single individual who is not? self-employed for the current taxation year is? ________.

Choose the correct answer.

A.

December 31 of the current taxation year

B.

December 31 of the subsequent taxation year

C.

April 30 of the subsequent taxation year

D.

June 15 of the subsequent taxation year

 

3. In order to avoid penalties and? interest, individuals must pay any taxes they owe for the current taxation year by? ________. (Assume all dates below fall on a? non-holiday week? day.)

Choose the correct answer.

A.

April 30 of the subsequent taxation year

B.

June 15 of the subsequent taxation? year, if the individual is involved in an unincorporated? business; otherwise April 30 of the subsequent taxation year

C.

June 15 of the subsequent taxation year

D.

April 30 of the subsequent taxation? year, if the individual is involved in an unincorporated? business; otherwise June 15 of the subsequent taxation year

 

 

4. Canadian residents who only have income from employment primarily pay their taxes? ________.

Choose the correct answer.

A.

when they file their tax return

B.

through income tax withholdings remitted to CRA by their employer

C.

through tax credit reductions on their tax returns

D.

through income tax instalments

 

5. For individuals who are required to pay income tax? instalments, the first instalment due date is? ________.

Choose the correct answer.

A.

March 30

B.

June 15

C.

April 30

D.

March 15

 

?6. Peter's income tax information contains the? following:

Estimated net tax owing for the current year is 11,000 .

Net tax owing for the previous year was 9,000.

Net tax owing for the second previous year was 10,000.

For the current taxation? year, what is the lowest first income tax instalment payment Peter can make without being assessed interest for late? instalments?

Choose the correct answer.

A 2,375

B 2,500

C,2,750

D,2,250

 

7. Assume Brian only has income from? self-employment for the current? year, and he lives in New Bruswick. In which of the following situations would he be required to make income tax instalment payments for the current? year?

Choose the correct answer.

A.

?Brian's net tax owing is 7,500 for the current year. His net tax owing was 2,400 and 2,300 in the two preceding years.

B.

? Brian 's net tax owing is 6,500 for the current year. His net tax owing was 2,400 and 6,800 in the two preceding years.

C.

? Brian 's net tax owing is 1,900 for the current year. His net tax owing was 6,500 and 7,400 in the two preceding years.

D.

? Brian 's net tax owing is 2,400 for the current year. His net tax owing was 2,700 and 2,100 in the two preceding years.

 

8. Suppose David receives a CRA instalment reminder for the first quarter of the current year in the amount of 2,100. David  does not make any instalment payments during the current year. David will not owe interest for a late instalment? ________.

Choose the correct answer.

A.

if his taxes owing for the current year are 5200 and his taxes owing for the previous year were 4200

B.

if his taxes owing for the current year are 6200 and his taxes owing for the previous year were 7200

C.

if David has little to no income in the current year and his estimated taxes owing is? $0

D.

regardless of any other facts

 

9. The amounts shown on CRA instalment reminders are best described as? ________.

Choose the correct answer.

A.

a payment amount an individual can make to be certain to avoid interest

B.

the maximum instalment that an individual can pay to avoid interest

C.

the minimum instalment that an individual can pay to avoid interest

D.

the amount an individual must pay to be compliant with instalment requirements

 

?10. ________ involves knowingly and willingly ignoring the tax law.

Choose the correct answer.

A.

Tax abuse

B.

Tax evasion

C.

Tax planning

D.

Tax avoidance

 

11. Which of the following is true with regard to the punishment for tax? evasion?

Choose the correct answer.

A.

The maximum punishment for tax evasion is? 10% of the relevant tax evaded.

B.

The punishments associated with tax evasion vary in form and? severity, but can? include: repayment of taxes? owed, large penalties and jail time.

C.

The minimum punishment for tax evasion is five years in prison.

D.

There is no punishment for tax? evasion, since tax evasion is okay as long as it is within the definition and spirit of the law.

 

12. What is the penalty to a tax return preparer who assists clients in engaging in evasive tax? practices?

Choose the correct answer.

A.

?50% of the amount of tax avoided

B.

?$100,000

C.

two years in prison

D.

the greater of? $1,000 and the penalty assessed on the tax return? preparer's client for evading tax

What is the penalty for intentionally disregarding the Income Tax Act and understating? tax?

Choose the correct answer.

A. the lesser of? $1,000 and? 50% of the understated tax

B.$200

C. the greater of? $100 and? 50% of the understated tax

D. 50% of the understated tax

 

13. The main purpose of the general? anti-avoidance rule? (GAAR) is to

Choose the correct answer.

A. provide legislation that can be used to enforce tax evasion.

B. provide legislation that can be used to apply civil penalties on? taxpayer's guilty of tax evasion.

C. provide a definition for the? term, "tax? avoidance".

D. provide legislation that can be used to enforce the concept of tax avoidance.

 

14. If an individual taxpayer disagrees with the assessment or reassessment of their income tax? return, the first step is to

Choose the correct answer.

A. appeal the assessment or reassessment at the Federal Court of Appeal.

B. take the matter to the Tax Court of Canada under the informal procedure.

C. contact Canada Revenue Agency to informally request a change to the income tax return.

D. file a formal objection to a notice of assessment? (Form T400A) with Canada Revenue Agency.

 

15. When a taxpayer disagrees with? CRA's interpretation of the Income Tax? Act, what options does the taxpayer? have?

Choose the correct answer.

A. none, since the? CRA's interpretation is final

B. file a court case to have a court make the final decision

C. ask for an interpretive ruling from the House of Commons

D. escalate the issue to the Minister of Finance

 

16. Which of the following are acceptable methods of filing a corporate tax return for a corporation with gross revenues of? $10 million?

Choose the correct answer.

A. paper file only

B. paper file or electronic file

C. electronic file only

D. electronic file or magnetic media

 

17. Which of the following is the tax return used by corporations to report their income tax liability in? Canada?

Choose the correct answer.

A. T2

B. T4

C. T3

D. T1

 

18. The normal filing due date for a corporate tax return is? ________.

Choose the correct answer.

A. April 30th of the following year

B. 6 months after the end of the? corporation's fiscal year

C. 4 months after the end of the? corporation's fiscal year

D. June 15th of the following year

 

19. In the case of a publicly held Canadian? corporation, any amount of tax due that was not paid through required installments is due? ________.

Choose the correct answer.

A. within 4 months of the fiscal year end

B. within 3 months of the fiscal year end

C. on the filing due date of the tax return

D. within 2 months of the fiscal year end

20. If a public corporation is required to make installment payments of estimated? tax, how often are the installment payments? made?

Choose the correct answer.

A. quarterly

B. weekly

C. monthly

D. semi-annually

21. ABC Corporation is a public corporation with a year end of December 31st. The company files its tax return on February 28th of the following? year, and the return indicates ABC will receive a tax refund. When will interest start accumulating on the refund due to ABC? Company?

Choose the correct answer.

A. 6 months after December 31st

B. 120 days after December 31st

C. Never, interest does not accumulate on a refund due to a taxpayer.

D. 30 days after February 28th

 

22. What is the maximum amount of time a taxpayer has to file a return to claim any portion of a refund due to the? taxpayer?

Choose the correct answer.

A. there is no time limit

B. 4 months from the year end

C. 6 months from the year end

D. 3 years from the year end

23. Corporations are required to make estimated tax payments when? ________.

Choose the correct answer.

A. estimated taxes payable for the current year exceed? $3,000

B. estimated taxes payable for the current year exceed? $10,000

C. actual taxes payable for the prior year exceeded? $3,000

D. estimated taxes payable for the current year and actual taxes payable for the prior year exceeded? $3,000

24. There is? (are) ________ acceptable? method(s) of calculating installment payments for corporations.

Choose the correct answer.

A. 1

B. 4

C. 3

D. 2

 

25. The method a corporation uses to calculate estimated tax installments? ________.

Choose the correct answer.

A. can be based on any reasonable method the corporation chooses as long as it does not result in an underpayment

B. is prescribed within the Income Tax Act based on each? corporation's particular situation

C. is determined by the? CRA, who subsequently notifies the corporation

D. can be selected by the corporation from allowable alternatives

 

?26. Company, a Canadian public? company, has estimated taxes of 240,000 for the current? year, actual taxes payable of 96,000 for the previous year and actual taxes payable of 84,000 for the second previous year. Which of the following is the lowest required 1st installment? payment?

Choose the correct answer.

A.8,000                

B.8,200

C.20,000

D.7,000

 

?27. ________ involves strategies that seek to minimize taxes while complying with the letter and spirit of enacted tax legislation.

Choose the correct answer.

A. Tax avoidance

B. Tax evasion

C. Tax planning

D. Tax compliance

 

28. Which of the following statements BEST describes tax? avoidance?

Choose the correct answer.

A. Willfully ignoring the letter and intent of the tax law in an attempt to minimize the amount of taxes paid by a taxpayer.

B. Employing strategies that follow the letter and intent of tax laws that seek to minimize the amount of taxes paid by a taxpayer.

C. Engaging in transactions that follow the letter of the law for the sole purpose of minimizing the amount of taxes paid by a taxpayer.

D. Taxpayers who flee the country when they are informed of the? CRA's intent to audit their tax records.

 

29. When considering the? anti-avoidance rules within section 245 of the Income Tax? Act, the primary determinant of whether a transaction is NOT an avoidance transaction is? ________.

Choose the correct answer.

A. if the transaction is legal

B. if the transaction has a bona? fide, non-tax business purpose

C. if the transaction resulted in a reduction of taxes payable to the taxpayer

D. if the transaction results in a tax benefit to the taxpayer

 

30. In accordance with ITA? 245(2), if a transaction is deemed to be an avoidance transaction under the general? anti-avoidance rules? (GAAR), which of the following will? happen?

Choose the correct answer.

A. The taxpayer will be denied the tax benefit that arose from the avoidance transaction.

B.A penalty of? 50% of the underpaid tax on the transaction will be assessed.

C. The tax return preparer will be subject to a? $100 penalty.

D. The taxpayer will face imprisonment for a period not exceeding 2 years.

 

31. Which of the following is a crime with the potential for prosecution in a criminal? court?

Choose the correct answer.

A. tax avoidance

B. tax compliance

C. tax evasion

D. tax planning

32. Penalties for tax evasion can be assessed on? ________.

Choose the correct answer.

A. the tax return preparer only

B. the? taxpayer, tax return? preparer, and the attorneys that defend either party

C. both the taxpayer and tax return preparer

D. the taxpayer only

 

33. If a paid tax preparer is found to have assisted a client in tax? evasion, the maximum penalty that the preparer can be assessed? is:

Choose the correct answer.

A. $1,000 plus the compensation received for preparation of the return and not more than 1 year of imprisonment

B. $1,000 plus the compensation received for preparation of the return

C. $100,000 plus the compensation received for preparation of the return

D. 50% of the amount of tax avoided by the tax payer plus the compensation received for preparation of the return

 

34. In order for a corporation to be a Canadian Controlled Private Corporation? (CCPCs), ________.

Choose the correct answer.

A. it CANNOT be controlled by Canadian residents

B. it CANNOT be controlled by Canadian public corporations

C. it CANNOT have shareholders that are public corporations

D. it CANNOT have? non-resident shareholders

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