BUSI-COMM%20Midterm%20May%202009%20%28questions%290

BUSI-COMM%20Midterm%20May%202009%20%28questions%290 -...

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STUDENT NAME__________________________ STUDENT #:______________________________ Sauder School of Business THE UNIVERSITY OF BRITISH COLUMBIA BUSINESS 355 Introduction to Income Tax Mid-Term Examination ***QUESTION BOOKLET*** May 30 th , 2009 Instructor: Tran Chung Total Marks: 40 Time: 180 minutes This examination consists of 9 pages including this cover page. Financial calculators can be used during this examination. Allocate your time carefully and clearly explain your analysis. The Income Tax Act is permitted to be used during exam (tabbed with name of provision, underlined, or highlighted, but no other notations or writings). Assume all persons are Canadian resident unless specifically stated otherwise. You CANNOT ask any questions during the exam. If there are any omissions or errors, please state them clearly and make the appropriate assumptions that you feel are necessary to complete the answer. Please answer all questions in the ANSWER booklet. 1
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Please answer the question in the answer booklet in PEN and CAPS . 1. Under a true flat tax system (where the first dollar of income earned is subject to the same rate of tax as the last dollar of income earned), the average tax rate should always be equal to the marginal tax rate. A. True B. False 2. Which of the following corporations would not be considered resident in Canada for tax purposes? A. Dontar Inc. was incorporated in Manitoba on April 5, 1965 and has carried on business in Canada since that date. B. Linco Ltd. was incorporated in Ontario on April 4, 1975 and, until the end of 1996, carried on business in Canada. At that time, all of the management and operations of the Company moved to the southern United States. C. Norad Inc. was incorporated in New York state on March 1, 1985 and, until the end of 1993, carried on business in Canada. At that time, all of the management and operations of the Company moved to the southern United States. D. Rio Amgal Inc. was incorporated in Montana on September 3, 2001. While the Company has operations in both Canada and the U.S., the directors live in Calgary. As a consequence, all director’s meetings are held in that city. . 3. All of the following statements are true, except: A. Canadian residents must report their worldwide income for tax purposes. B. If an individual is a resident of Canada for part of the calendar year, that individual only has to report his worldwide income during the period of residency for Canadian tax purposes. C. An individual who immigrates to Canada during the year is a resident of Canada for tax purposes for the full calendar year. D. An individual can be a resident of Canada for tax purposes, even if she is not a Canadian citizen. 2
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BUSI-COMM%20Midterm%20May%202009%20%28questions%290 -...

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