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Stack #4694163
| Questio | Answer |
|---|---|
| Why does the Government of Cda like individuals to invest in businesses? -C.6. | Because doing so helps create jobs that are vital to a healthy economy. |
| Who governs Registered plans? -C.6. | income Tax Act |
| If you are buying shares in a company, what does that mean? -C.6. | It means you are investing in that business. |
| Beatrice just had her 60th birthday, has health issues, some RRSP savings & wants to know about Gov't programs, what 2 say? -C.6. | Tell her she could get CPP benefits today but they would be a reduced amount & OAS payments start at age 65. |
| Which investments qualify within an RRSP? -C.6. | Cdn stocks; Mutual fund units in a closed end mutual fund; & Foreign securities |
| What steps to take to calculate the Dividend Tax Credit? -C.6. | 1. Gross up 38%. 2. Tax x MTR. 3. 15.02% x G. 4. Net amount of tax owed (2. - 3. ) |
| How to caluculate Capital Gain & the Captial Gain Tax amount. -C.6. | Investment Amt - Original Amount Invested = Difference x 50% |
| How to calculate an individual's contribution room? -C.6. | Total earnings x 18% - PA |
| What constitutes earnings for RRSP purposes? -C.6. | WHY - wages;DON'T - DisabilityPymt CPP; REALLYRoyalty; RICH - research grantsATHLETES -Alimony; RETIRE - Rental income;SOONER - supplementary e.i |
| What is contribution in-kind? -C.6. | When an individual transfers assets ( ie. securities) into an RRSP in lieu of cash. |
| How to calculate the tax payable on a capital gain? -C.6. | Cap. Gain Amount x 50% x MTR = total tax savings |
| What if you've invested in RESPs & the kid doesn't end up going to school? -C.6. | Plan B for RESP = S-sibling transfer?Savings (contribt'ns return'd) Taxed on Accumulated Investment Earnings;T-time open up to 36 years. |
| What does PA mean? -C.6. | Pension Amount |
| When you buy a bond, are you investing? -C.6. | No; You are acting as a creditor loaning your money out to the company. |
| How many parts are there to an RESP? & What are they? -C.6. | 3. 1-Original contributions. 2-CESG grants. 3-Accumulated Investment Earnings (AIPs) |
| How do you calculate tax on an RRSP tax deduction? -C.6. | RRSP Contribution Amount x MTR |
| What is the amount the Gov't matches in your annual RESP contributions? -C.6. | 20% up to a max of $500. |
| What is the age limit for the CESG? -C.6. | Available until the end of the year the child turns 17. |
| What is the CESG meant to help pay for? -C.6. | Helps to pay for tuition, books, & living expenses. |
| Is there a maximum CESG limit? -C.6. | Yes, the lifetime maximum per child is $7.200 |
| Does the Gov't give any additional CESG? -C.6. | Yes, if the family has a low income of up to $55,567, Gov't gives 40% on 1st $500 & 20% on the next $2,000. For middle income families making between $55,567 - $111,771, Gov't gives 30% on first $500 & 20% on next $2,000 plus. |
| How to figure out what amount a family's CESG grant amount will be? -C.6. | Add up both incomes & multiply the matching tier %'age for the first $500 & then 20% on the next 2,000 + |
| What is the lifetime contribution limit per child in an RESP? -C.6. | $50,000 |
| What type of pension plan is common among unionized employees? -C.6. | Flat Benefit plans |
| What kind of income is taxed at taxpayers Marginal Tax Rate? -C.6. | Interest Income & Foreign dividend income |
| What type of RRSP is appropriate for an unsophisticated investor who doesn't have time to manage his account and only has small amounts to invest? -C.6. | Single Vendor RRSP ( like a bank) |
| What stock is a dividend? -C.6. | A dividend paid in stock |
| Will a stock dividend decrease the Compny's working capital? -C.6. | No! It will not impact the Company's bank account because it's not paid in cash. |
| What are the 3 rules regarding contribution in kind? -C.6. | 1. RRSP tax recipt is given based on the market balue on the day of contribution. 2. If market value increased, you have to pay the capital gain. 3. If the market value decreased, you DON'T get to claim the capital loss! |
| Self-driected RRSP's are for what type of investor? -C.6. | Investors who make investment decisions with or without the advice of a professional. |
| Interest, dividends ( from Cdn Co's), & capital gains are all taxed didfferently. List them in order of most tax advantaged to least. -C.6. | 1. Capital Gains 2. Dividends 3. Interest |
| What is the requirement of somone who converted their RRSP to a RRIF? -C.6. | There is a minimum that they must withdraw each year. |
| What are the criteria for opening a TFSA? -C.6. | 1. Must be a Cdn resident; must be at least 18 yrs of age; & you don't need to have earned and income. |
| How are withdrawals attributed back to the contributor with a Spousal RRSP? -C.6. | 1. If the withdrawal is made in the same year as the contribution or in the next 2 years, the contributor gets taxed - LIFO - Last In, First Out gets taxed. |
| How long can you carry forward unused contribution room? -C.6. | There's no limit! |
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