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### 70 Cards in this Set

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 What are the three steps for calculating childcare deductions? 1. Calculate lower spouse's deductions2. Calculate higher spouse's deductions3. Lower spouse deduction - higher spouse deduction Lower: annual, actual, 2/3 EAHigher: Ann., Act., 2/3 EA, Periodic [Annual x 2.5% X # wks] What are the annual cost limits for childcare deductions? - \$8000 for child 0-6- \$5000 for child 7+- \$11000 for severely disabled child Name some examples of PUPs Furniture, boats, cars, vacation homes These are things that won't typically gain value over the years Name some examples of LPPs Coin collection, stamps, art, jewelry, rare things These things will typically increase in value over the years What is the Floor Rule? Applied to PUPs and LPPS, Proceeds of Disposition and Adjusted Cost Bases must be minimum \$1000 What is the calculation process for RSP Deductions? Find the lesser of:* Actual contribution dollars* Government limit: \$25,370 - pension adjustment + unused room* EA: (18% * Earned Income) - Pension Adjustment + Unused Room How long can a taxpayer carry forward NET capital assets? FOREVER :) True or False: Personal Use Property can be carried forward 3 years False! There is no carry forward OR backward for PUPs An employee is given a loan of \$100,000 on February 15. The CRA's prescribed rate is 3%, and the employee's rate is 2%. What is the employee's interest benefit? 100,000 * (3%-2%) * (319/365 days)\$873.98 What is the class number and depreciation percentage for software? Class 50, 55% Define the calculation for calculating bond interest for corporations. Principle x interest x days outstanding How is the Employer's portion of life insurance premiums credited? The employer's portion is a taxable benefit, so would be noted as extra income If a taxpayer is driving an employer-leased vehicle, how is the standby cost calculated? 2/3 x least cost/month x months available to employee Rental income is calculated as: Rental revenue- rental expenses (I.e., maintenance, property tax)= rental income- CCA= net rental income What is the tax credit distribution for donating to Politics? First \$400 = 75%Next \$300 = 50%Next \$525 = 33.3% Total = \$650 First 400\$ = 75%(2 more subsequent brackets) What is the tax credit distribution for charitable donations? 15% of first \$200 29% of additional donations How does one calculate straightline deductions in capital allowance? ccc What are the guidelines for Class 10.1 assets? ddd What is the rule regarding deducting expenses from commission when calculating income? if expenses are greater than earned commission, then the taxpayer is unable to claim commission as income Describe the differentiating factors between the Caregiver Credit and the Infirm Dependent Credit. Caregiver - Parents/grandparents do NOT have to be infirmed if +65 years old.Caregiver - Provides in-home care for certain adultsInfirm Dependent -Dependent does NOT have to live with the taxpayer (i.e., can live in a facility) What is the Family Caregiver Amount? \$2093*can be added to spousal, eligible dependent, caregiver, and infirm dependent tax credit Provide some examples of deductible expenses for home work spaces. Any of the below operating/maintenance expenses:*Mortgage interest*Rent*Property Taxes*Insurance*Business phone line If a home work space occupies 300 square feet of a 1200 square foot home, what percentage of expenses can be deducted? 25% The taxpayer can only deduct the portion of space that is occupied strictly for work. What is the calculation for the exempt portion of a principal residence gain? Capital GainX(1+# of years designated PR) / # of years owned When a person owns ONE residence, the gain will _________; In a situation where more than one residence is owned, the taxpayer may designate _______ home(s) as the principal residence(s). always be full exempt; ONE In calculating childcare deductions, the parents will claim the lesser of these amounts: 1. Actual amounts spent (remember special rules for camps);2. Annual limits;3. 2/3 Earned Income (EA)4. **For HEA Parent only** Annual limit x 2.5% x number of wks LEA parent unavailable disposed What is the process individuals must use for reporting interest income? Individuals will use a blend of accrual and cash methods What is the maximum amount of time that may be claimed for food/lodging when calculating moving expenses? 15 days Property income is comprised of InterestDividendAnd rental income True or False: Legal fees are deductible True! Subtract them when calculating Div B. True or False: Spousal and child support are taxable income FalseOnly spousal support can be credited as taxable income; child support is non-taxable, and would not be recorded. Which 3 tax credits should be included as soon as we find out someone's employed? 1. CPP2. EI3. Employment Credit (lesser of employment income or \$1161) What is the maximum EI tax credit? \$955 What is the maximum CPP tax credit? \$2544 What is the Child fitness credit? Max. \$500 What is the Caregiver Tax Credit? \$4,667 What are two important steps to remember when calculating tax rates? 1. Start by finding the taxable income closest to the amount in column A of the Tax Rate chart, calculate the corresponding tax percentage 2. Multiply the excess by the next highest marginal rate Add the two numbers together for Gross Federal Tax What is the Disability Tax Credit? \$8001. What is the child supplement for the Disability Tax Credit? \$4667. Add to the \$8001 of the Disability Tax Credit Business Revenue is comprised of: All sales sold and receivable;Previously written-off bad debts that are connected Business Income is ___% taxable, while Capital Gains are ___% taxable. 100%, 50% Business Income is ___% taxable, while Capital Gains are ___% taxable. 100%, 50% To calculate Gross Profit when calculating Business Income, we: -Calculate Revenue -subtract--COGS--Expenses--CCA = Net Income for Tax Purposes Exemptions from Business Income include: - personal expenses- charitable/political donations- salaries/wages paid to self- life insurance premiums (unless business-required) What turns Div B income into Div C income? The reduction of loss cfwds from Net Income. Remember to include _____ carry-forward when calculating Div B income; ____ and ______ will be used after to calculate Div C income. LPP Net/Non Capital True or False: Net Capital Loss cfwd should always be calculated first True! Net capital loss can only be used against Taxable Capital Gains. Non-capital losses are made up of: Losses from employment, property, and business Applicable to any income Non Capital Loss can be claimed on income, so long as: A) the losses do not exceed the year's income;B) the cfwd is within 20 years;C) the carryback is within 3 years If Mr. X has a taxable income of \$62,000, what is his Gross Federal Tax? 1. Calculate closest excess point;\$45282 tax = \$67922. Calculate excess \$\$\$62000-45282 = 167183. Calculate the marginal rate on the excess \$\$\$ 16718*20.5% = 34274. Add together the federal tax and marginal rate6792+3427 = 10219 The maximum amount of tuition/textbook/education credit that can be transferred to a parent, spouse, or grandparent is: \$5,000 What is the age requirement for the Age Credit, and what is the amount? When is the credit eliminated? Canadian residents aged 65+; Credit = \$7,125Eliminated when net income exceeds \$83,427 Corporations not not allow the following deductions: - Charitable/political contributions- life insurance premiums (unless required for collateral)- membership fees for dining/sport/Rec facilities- foreign print/broadcast directed to Canadian markets (ie., American publication targeted at Cdns) What are the questions to ask when a disposal or sale occurs for Corporations? 1. Did a capital gain/loss occur?2. Did an accounting loss/gain occur?3. Did a terminal loss/recapture occur? Appraisal fees are deductible for Corporations only in 1 scenario: Deductible if the appraisal is for insurance reasons. Amortization of bond discounts, write-downs on assets, and charitable donations are examples of what should/n't be included in Schedule 1 calculations. These should not be included. Amortization of bond discounts, write-downs on assets, and charitable donations are examples of what should/n't be included in Schedule 1 calculations. These should not be included. When calculating Corporation's business incomes, we _____ amortization and _______ CCA We add back amortization, and we deduct CCA Remember: AA When recording CCA disposals, remember to record the _____ of costs and proceeds. Lesser CCA is considered recaptured when: When UCC is negative prior to claiming CCA Terminal Loss occurs in CCA when... ...There is a remaining balance in a class even after all assets have been sold/disposed of Leftovers What are class 8 assets? comprised of: machinery, equipment, furniture, and fixturesRate: 20% Traveling costs, food and lodging, and furniture storage are included in... Moving expenses! Legal expenses and transfer taxes are incurred only when... The taxpayer has owned and sold his previous residence (no renters) Moving expenses typically break down to four categories: 1. The costs of selling an old home;2. Costs of buying the new home;3. Costs of moving from one location to another4. Idk Moving expenses that are _____ than income at new job can be carried _____. Moving expenses that are greater than income at new job can be carried forward in the following year. The dividend tax credit will be calculated by multiplying ___ by ____. The Grossed amount by either 15.02% or 10.52% The dividend tax credit will be calculated by multiplying ___ by ____. The Grossed amount by either 15.02% or 10.52% The medical expense credit is calculated by: 15% x (qualifying medical expenses - the lesser of <3% net income or \$2237>) What are the weekly limitations on camps/boarding school for childcare deductions? 200\$ for ages 0-6125\$ for ages 7+ 275\$ for severely disabled