1) Carla lives in Detroit, Michigan, USA. She commutes daily to Windsor, Ontario, Canada, where she is employed by Ford Motor Company of Canada Limited. She works 9 am to 5 pm, Monday through Friday. Which one of the following best indicates Carla’s residency status for Canadian income tax purposes for 2020?

(a) A full-time resident

(b) A part-year resident

(c) A non-resident

(d) A deemed resident (sojourner)

2) ABC Inc. provides Ginger Kelly with a company car. The car is leased for $700/month (including 13% HST and excluding insurance) and was made available to her for eight months. ABC pays all of the operating costs which amounted to $3,500 in 2020. Ginger drove 13,000 kilometres in 2020 of which 8,000 were for business. What is the minimum taxable benefit that Ginger must include on her 2020 personal tax return?

(a) $2,100 rounded 

(b) $1,500 rounded 

(c) $3,150 rounded 

(d) $2,800 rounded 

3) Which of the following is a taxable benefit?

(a) A cash Christmas gift to an employee from the employer valued at $450.

(b) Payment of the tuition for an employee completing a degree that will benefit the employer.

(c) A 20% discount on the employer’s merchandise, available to all employees.

(d) Subsidized meals offered to all employees of the company assuming the price is approximately equal to the cost. 

4) Scott Bicycle Manufacturing Ltd. is a CCPC. Brian Mills, one of the employees, was granted a stock option on October 11, 2012 for 10,000 shares at $3 per share. Brian exercised the stock option on September 30, 2015 when the market price was $6 per share. In February 2020, Brian purchased a new home and sold the shares for $7 each. The fair market value on October 11, 2012 was $4. What is the effect of the above on Brian’s income for tax purposes, assuming Brian wants to minimize taxes?

(a) $15,000 in 2015

(b) $15,000 in 2020

(c) $30,000 in 2015

(d)    $35,000 in 2020

5) 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.

6) Frank moved to Canada from Germany on February 20, 2020. Which of the following accurately describes Frank's tax status for 2020? 

(a) Frank will be taxed in Canada on all his worldwide income earned in 2020 because the time he spent in Canada exceeds 183 days.

(b) Frank will be taxed in Canada on all his worldwide income earned in 2020, multiplied by the number of days spent in Canada and divided by 365.

(c) Frank will be taxed in Canada on all his worldwide income earned from February 20, 2020 to December 31, 2020, except for gains or losses on the sale of capital property owned prior to entering Canada.

(d) Frank will be taxed in Canada on all his worldwide income earned from February 20, 2020 to December 31, 2020.

7) Which one of the following would be considered employment income for Canadian income tax purposes for 2020?

(a) Amounts paid by your employer for counselling services in respect of mental and physical health.

(b) A private health services plan premium paid by your employer.

(c) Benefits paid by your employer to a deferred profit sharing plan that does not pay out until 2030.

(d) An all-expense-paid trip to Europe provided to you by a supplier of your company for reaching a sales quota.

8) Which one of the following is deductible in computing income from a business or property?

(a)  $6,000 of legal expenses related to the purchase of an investment in shares.

(b)  $5,000 of legal expenses for the purposes of obtaining a permit to sell Microsoft products

(c)  Interest paid on a loan used exclusively to purchase investments in a tax-free savings account.

(d) $6,000 of donations to a federal political party.

9) Mu Mu made a permanent move to the United States on September 1 of this year, after having lived in Canada all of her life. Mu is 22 years old. Which one of the following best indicates Mu’s residency status for Canadian income tax purposes for this year?

(a)  A full-time resident

(b) A part-year resident

(c) A non-resident

(d) A deemed resident (sojourner) 

10) 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