Exam (elaborations)
TAX 301 CHAPTER 9 PRACTICE EXAM
- Course
- Institution
TAX 301 CHAPTER 9 PRACTICE EXAM....
[Show more]
Content preview
An individual owns shares with an FMV that is greater than their ACB. Theindividual wishes to transfer ownership of the shares to their spouse. How can
the individual avoid having the income from these shares attributed back to
them? What are the income tax consequences if the income attribution rules
apply?
-individual must opt out of the spousal rollover which is accomplished by
reporting the gain on the shares in the individual income tax return for the year
of the transfer based on the FMV of the shares at the time
-spouse must provide consideration for the shares that is equal to the FMV of
the shares received
-consideration must either be provided out of the spouse's own funds but can
also be a promissory note that pays interest at the prescribed interest rate or
higher
-If income attribution applies, the IT consequences would be that any income
earned by the recipient spouse would be attributed back to the individual
transferor
-if the recipient spouse sells the shares, any capital gain or loss on the sale
would also be attributed back to the individual transferor
T/F? Workers' Compensation payments are included in net income, but
deducted in the determination of taxable income.
True. Workers' Compensation payments are included in net income but are
deducted in the determination of taxable income. The result is that none of the
amounts are actually subject to income tax.
Brainpower
Read More
T/F? Moving expenses can only be deducted to the extent of employment
income earned at a new work location.
False. They can also be deducted against business income and scholarships,
bursaries and research grants to the extent there is an amount required to be
included in net income.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Boostertips. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67163 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now