ACCT
ACCT 385 - CCTX 511 - MT Summer 2016

She is scheduled to appear in court next week to

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She is scheduled to appear in court next week to claim that she was a non- resident of Canada during the two-year period and, therefore, should not be liable for Canadian tax. Both the CRA and Jennifer’s counsel agree on the following facts: ● Jennifer is a Canadian citizen and all of her direct family resides in Saskatchewan. ● Jennifer’s fiancé visited her five times during the two-year period and lived in Chile during his summer vacations. He plans to complete his accounting designation with a Canadian firm in Saskatchewan. ● All of Jennifer’s income during the two-year period was paid by the Chilean school (January 2007–January 2009). ● Upon departing for Chile, Jennifer put all of her furniture in storage and leased her car to her younger sister on a month-to-month basis. Her household belongings were shipped to Chile. ● While in Chile, she maintained her provincial health care policy, her Canadian savings account and a Canadian American Express card. She cancelled her Canadian chequing account, and her Canadian Visa card. ● Before leaving, she cancelled all of her club memberships and abdicated her position as the honourary chair of the Beta Gamma Phi sorority. ● While in Chile, she made no attempt to learn Spanish. Jennifer did not join any Chilean social or professional organizations while she was there. She rented a one-bedroom apartment from another Canadian living in Osorno. ● Over the two-year period, Jennifer visited Canada each Christmas, at Easter, and for the marriage of her best friend. Her total number of days in Canada over the two-year period amounted to 50 days. 7
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ACCT 385 - CCTX 511 Question 5 – Cont’d Required: Jennifer’s litigation counsel would like your advice on the income tax options for the two year period during which Jennifer worked in Chile. Provide your perspective on the facts that support (i.e., state which facts support each residential status) each place of residence and the tax consequences of each residential status. Weigh the relevance of the facts and conclude on the likely outcome in this situation. Question 6 (10 marks – 15 minutes) Liam made the following contributions (withdrawals) to his Tax Free Savings Account (TFSA): 2009: $2,000 2010: 3,000 2011: 4,000 2012: (9,000) No contributions were made. 2013: 5,000 2014: 3,000 2015: ???? Required: a) What is the maximum contribution that Liam can make in 2015? (7 marks) b) Liam’s brother, Michael, celebrated his 21st birthday in 2015. He has yet to open a TFSA. What is the maximum amount he can contribute to his TFSA in 2015? (3 marks) 8
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ACCT 385 - CCTX 511
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  • Spring '11
  • GOLDSMAN
  • Income Tax Act

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