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Exam 10: Retirement Savings and Other Special Income Arrangements

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Question 31

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For 2019, Andrew Flack has Earned Income for RRSP purposes of $96,000. He is not a member of an RPP or a DPSP. While he had no undeducted contributions at the end of 2019, he had unused RRSP deduction room of $6,500. During 2020, he contributes $9,000 to his RRSP and make an RRSP deduction of $8,500. What is the amount of Mr. Flack's Unused RRSP Deduction Room and undeducted RRSP contributions at the end of 2020?

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The required calculation would be as fol...

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Question 32

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In early 2017, Jason Borshiov withdraws $21,000 from his RRSP under the provisions of the Home Buyers' Plan (HBP). Because of a large bonus received from his employer, he repays $7,000 of this in 2018. What is the minimum required payment for 2019? If he makes no payment in 2019, what will be the minimum required payment in 2020?

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Mr. Borshiov's minimum payment for 2019 ...

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Question 33

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One of your clients is considering the withdrawal of a portion of his RRSP balance under the provisions of the Home Buyers' Plan. List and briefly explain any factors that should be considered before deciding to make this withdrawal.

Which of the following statements about Lifelong Learning Plans (LLPs) is NOT correct?

Which of the following statements with respect to profit sharing plans is correct?

Mr. Marco Marconi has net employment income of $78,300, after the deduction of $2,400 in RPP contributions for the year. In addition, he has a business loss of $6,750, taxable dividends of $5,640, and pays $12,400 of deductible support to his former spouse. What is the amount of Mr. Marconi's Earned Income for RRSP purposes for the year?

For each of the key terms listed, indicate the BEST definition of that term, or that none of the definitions apply.

Parviz withdrew $15,000 from his RRSP under the Home Buyers' Plan in 2018 and used the funds for a down payment on a qualifying home. He made a repayment of $700 during 2020. Taking into consideration his repayment, his Home Buyers' Plan will have what effect on his 2020 taxable income?

During the year ending December 31, 2019, Wilma Collins has employment income before the deduction of any RPP contributions of $40,000, a net rental loss of $16,000, dividends from taxable Canadian corporations with a total grossed up amount of $6,000, and income from royalties of $7,000. The royalties were on a book written by Ms. Collins in her undergraduate years at university. She has no Unused RRSP Deduction Room from previous years. She is not a member of a Registered Pension Plan or a Deferred Profit Sharing Plan during 2019. Her maximum deductible 2020 Registered Retirement Savings Plan contribution is:

During the year ending December 31, 2019, Joyce Collins has employment income before the deduction of any RPP contributions of $40,000, a net rental loss of $16,000, interest income of $6,000, and income from royalties of $7,000. The royalties were on a book written by Ms. Collins in her undergraduate years at university. She has no Unused RRSP Deduction Room from previous years. She is not a member of a Registered Pension Plan during 2019. She has contributed $2,000 to her husband's Registered Retirement Savings Plan in 2020. The maximum deductible 2020 Registered Retirement Savings Plan contribution to a plan in her name is:

A Registered Retirement Savings Plan is considered to be a spousal Registered Retirement Savings Plan if a spouse or common-law partner has made any contributions to the plan at any time since its inception.

Describe the tax features associated with retirement compensation arrangements.

One of your friends, a very wealthy businessman, has indicated that he never makes contributions to his RRSP in excess of amounts that he can deduct. His reasoning is that this doesn't make sense because, even though the contributions cannot be deducted when they are made, they will be subject to tax when they are withdrawn. Do you agree with your friend? Explain your conclusion, indicating any assumptions that you have made.

Which of the following statements with respect to Registered Retirement Income Funds (RRIFs) is NOT correct?

Which of the following statements with respect to Registered Retirement Income Funds (RRIFs) is correct?

Cody Bryant's spouse has had an RRSP for several years. For the first time, during 2018, Cody makes a contribution to this plan. The amount of the 2018 contribution is $4,500 and this is followed, in 2019, by an additional contribution to his spouse's plan of $5,500. Cody deducts both of these contributions. At the beginning of 2020, his spouse's plan has a balance of $226,000. During this year, she withdraws $11,000 from her RRSP. How will this withdrawal be taxed?

Describe the types of individuals that can be members of a pooled registered pension plan.

There are a number of tax free transfers of accumulated pension entitlements. Indicate the transfer that is NOT tax free.

In almost all cases, making contributions to an RRSP will provide for the deferral of income tax. In some cases, making such contributions may result in avoidance of tax. Explain these statements.

Yukie has net employment income of $35,000. During the year, she received spousal support payments of $8,000, child support payments for her 10 year old daughter of $12,000 and an inheritance consisting of a $50,000 term deposit that paid interest of $2,000 in the year. Her Earned Income for RRSP purposes is: