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ACCT2028Mid-TermPractice Examination (125 marks)1.Children of members of the Canadian armed forces are considered to be Canadian residents, without regard to where they actually live.a.Trueb.False2.Which of the following is NOT a factor in determining whether an individual has ceased to be a Canadian resident?3.The goods and services tax is assessed at a single rate, applied to certain specified goods and services. Despite the use of a single rate, this tax is criticized for being a regressive tax. What is a regressive tax? Explain how a tax that is assessed at a single rate can be considered regressive. (2 marks)4.With respect to Canadian income taxes on non-residents, which of the following statementsis NOT correct?5.
For each of the following persons, indicate how they would be taxed in Canada for the yearending December 31, 2019. Your answer should explain whether the person is a Canadianresident, what parts of their income would be subject to Canadian taxation, and the basisforyour conclusions (6 marks).Case 1In 2019, Mark’s Canadian employer asked him to spend two years working in their Delhioffice. His employment contract requires him to return to Canada in 2020. Mark severs all ofhis residential ties with Canada and moves to Delhi in November, 2018. He is not present inCanada during any part of 2019.Case 2Maxine is married to a member of the Canadian armed forces who is serving in Latvia. She is a
Mid-term practice testcitizen of Latvia and has never visited Canada. During 2019, because her husband is amember of the Canadian armed forces, she is not subject to taxation in Latvia.Case 3Susan is a U.S. citizen who lives in Detroit, Michigan. During 2019 she is employed 5 days perweek in Windsor, Ontario. Her 2019 salary is $65,000. In addition, she has $2,000 (Canadian)of interest on a savings account with a Detroit bank.6.The following four Cases make different assumptions with respect to the amounts of income and deductions of Ms. Susan Reed for the current year:Required For each Case, calculate Ms. Reed’s Net Income For Tax Purposes (Division B income). Indicate the amount and type of any loss carry overs that would be available at theend of the current year, or state that no carry overs are available (8 marks).7.Under what circumstances must an individual file an income tax return? If an individual isrequired to file an income tax return, by what date must it be filed? (2 marks)