Income Tax Chapter 1
t/f A value added tax is a tax levied on the increase in value of a commodity or service that has been
created by the taxpayer's stage of the production or distribution cycle. - ✔✔ correct answer True
t/f Only individuals, corporations, and trusts are taxable entities for income tax purposes - ✔✔ correct
answer False
t/f Partnerships engaged in commercial activity are taxable entities for GST purposes. - ✔✔ correct
answer True
t/f In general, provincial taxes are based on a specified percentage of federal taxable income - ✔✔
correct answer False
t/f The federal government collects taxes for Ontario. - ✔✔ correct answer false
t/f Even if the rate is the same on all transactions, it will be a higher rate on the taxable income of lower
income individuals because they spend a larger percentage of their income - ✔✔ correct answer True
t/f Progressive rates discourage both employment and investment, thereby limiting economic growth. -
✔✔ correct answer false
t/f Tax expenditures are less costly to administer than direct funding programs. - ✔✔ correct answer
True
t/f Part I of the Income Tax Act is the largest and the most important part. - ✔✔ correct answer True
t/f The citation ITA 61(4)(b)(ii) would be read Section 61, Subsection 4, Paragraph b, Subparagraph ii. -
✔✔ correct answer False
Which of the following types of taxes is not currently in use by the federal government of Canada? - ✔✔
correct answer head tax
t/f A value added tax is a tax levied on the increase in value of a commodity or service that has been
created by the taxpayer's stage of the production or distribution cycle. - ✔✔ correct answer True
t/f Only individuals, corporations, and trusts are taxable entities for income tax purposes - ✔✔ correct
answer False
t/f Partnerships engaged in commercial activity are taxable entities for GST purposes. - ✔✔ correct
answer True
t/f In general, provincial taxes are based on a specified percentage of federal taxable income - ✔✔
correct answer False
t/f The federal government collects taxes for Ontario. - ✔✔ correct answer false
t/f Even if the rate is the same on all transactions, it will be a higher rate on the taxable income of lower
income individuals because they spend a larger percentage of their income - ✔✔ correct answer True
t/f Progressive rates discourage both employment and investment, thereby limiting economic growth. -
✔✔ correct answer false
t/f Tax expenditures are less costly to administer than direct funding programs. - ✔✔ correct answer
True
t/f Part I of the Income Tax Act is the largest and the most important part. - ✔✔ correct answer True
t/f The citation ITA 61(4)(b)(ii) would be read Section 61, Subsection 4, Paragraph b, Subparagraph ii. -
✔✔ correct answer False
Which of the following types of taxes is not currently in use by the federal government of Canada? - ✔✔
correct answer head tax
