Solutions Manual for Canadian Income Taxation
2023/2024, 26th Edition by William Buckwold
How do you enact a law? - ANSWER: The legislation process starts with the proposal,
formulation, an drafting of a bill and goes through a number of stages in the HOC
and Senate before it becomes a law.
The stages in the HOC and Senate before becoming a law - ANSWER: 1. Notice of a
motion for leave to introduce and placement on Order Paper
2. Preparation of a bill by a committee (where applicable)
3. Introduction and first reading
4. Reference to a committee before second reading (where applicable)
5. Second reading (debate the scope) and reference to a committee
6. Report stage (further study as necessary)
7. Third reading (and passage)
8. Consideration and passage by the Senate
9. Passage of Senate amendments by the HOC (where applicable)
10. Royal Assent and Coming into force
Double Taxation - ANSWER: is a taxation principle referring to income taxes paid
twice on the same source of earned income.
Three levels of court for tax - ANSWER: Tax Court of Canada, Federal Court of
Appeal, The Supreme Court of Canada
What are the regulations of the Income Tax Act (Section 221) - ANSWER: It gives the
Governor General the right to prescribe further detail, definition, administrative
filings or requirements.
Enables Parliament to delegate powers to the Cabinet Ministers who approve before
going to the Governor General
Example of a regulation of the Income Tax Act - ANSWER: Rules on capital allowance
(how to depreciate your capital asset)
Advance Tax Ruling - ANSWER: In advance of a contemplated transaction a tax payer
will submit a series of transactions and his interpretation of the Tax law to rulings
directorate of the CRA. CRA will decide whether this interpretation is valid.
There is a fee!!
How does a Tax treaty come into force? - ANSWER: It is signed and negotiated and
must receive ratification by Parliament to be effective. Treaty will contain an article
for a mutual agreement procedure to exchange information.
, What are the Tax Information Exchange Agreements for? - ANSWER: Promote and
provides for the mutual exchange of tax information that is possessed by, or
accessible to, the tax authorities of either jurisdiction in order to better administer
and enforce taxation laws to prevent international fiscal evasion,
Interpretation Bulletins - ANSWER: CRA's interpretation of the Tax law
Information Circulars - ANSWER: CRA's administrative procedures
Folios - ANSWER: CRA organizing into 7 series
When does the Federal Budget Process begin - ANSWER: Starts in June of each fiscal
year through till March
What are the steps for the Federal Budget Process - ANSWER: 1. Budget Preparation
2. Budget Consultation
3. Budget Strategy and Speech
If an individual is an resident in Canada, they are taxed on what income? - ANSWER:
Worldwide income, including non Canadian sourced income (reported in CDN$)
Ties that are significant - ANSWER: 1. Dwellings: If a persona maintains his dwelling
in Canada (exception is renting while away)
2. Spouse/Partner: If a spouse/ partner stays in Canada. (exception if they were living
separate upon leaving)
3. Dependents: If individuals has dependents living in Canada while aboard.
Secondary ties that can be considered when deciding residency - ANSWER: 1.
Personal Property (i.e furniture, clothing cars)
2. Social Ties (memberships, religious organizations)
3. Economic ties (employment with Canadian employer, active involvement in a
Canadian bus, Canadian bank account, retirement savings plans, credit cards,
securities)
4. Landed immigration status/ work terms
5. hospitalization/ medical coverage from province
6.drivers license from a province
7. Seasonal dwelling/ leased dwelling
8. Canadian Passport
9. Memberships with unions/professional organizations
When is a corporation deemed to be a Canadian resident? - ANSWER: Common law
rules are based on central mind and management of BOD, i.e where Board makes
decisions
Sojourn Rule - ANSWER: A test for an individual who is already considered non
resident to see if they are deemed a resident. Under the rule, a sojourn is deemed a
2023/2024, 26th Edition by William Buckwold
How do you enact a law? - ANSWER: The legislation process starts with the proposal,
formulation, an drafting of a bill and goes through a number of stages in the HOC
and Senate before it becomes a law.
The stages in the HOC and Senate before becoming a law - ANSWER: 1. Notice of a
motion for leave to introduce and placement on Order Paper
2. Preparation of a bill by a committee (where applicable)
3. Introduction and first reading
4. Reference to a committee before second reading (where applicable)
5. Second reading (debate the scope) and reference to a committee
6. Report stage (further study as necessary)
7. Third reading (and passage)
8. Consideration and passage by the Senate
9. Passage of Senate amendments by the HOC (where applicable)
10. Royal Assent and Coming into force
Double Taxation - ANSWER: is a taxation principle referring to income taxes paid
twice on the same source of earned income.
Three levels of court for tax - ANSWER: Tax Court of Canada, Federal Court of
Appeal, The Supreme Court of Canada
What are the regulations of the Income Tax Act (Section 221) - ANSWER: It gives the
Governor General the right to prescribe further detail, definition, administrative
filings or requirements.
Enables Parliament to delegate powers to the Cabinet Ministers who approve before
going to the Governor General
Example of a regulation of the Income Tax Act - ANSWER: Rules on capital allowance
(how to depreciate your capital asset)
Advance Tax Ruling - ANSWER: In advance of a contemplated transaction a tax payer
will submit a series of transactions and his interpretation of the Tax law to rulings
directorate of the CRA. CRA will decide whether this interpretation is valid.
There is a fee!!
How does a Tax treaty come into force? - ANSWER: It is signed and negotiated and
must receive ratification by Parliament to be effective. Treaty will contain an article
for a mutual agreement procedure to exchange information.
, What are the Tax Information Exchange Agreements for? - ANSWER: Promote and
provides for the mutual exchange of tax information that is possessed by, or
accessible to, the tax authorities of either jurisdiction in order to better administer
and enforce taxation laws to prevent international fiscal evasion,
Interpretation Bulletins - ANSWER: CRA's interpretation of the Tax law
Information Circulars - ANSWER: CRA's administrative procedures
Folios - ANSWER: CRA organizing into 7 series
When does the Federal Budget Process begin - ANSWER: Starts in June of each fiscal
year through till March
What are the steps for the Federal Budget Process - ANSWER: 1. Budget Preparation
2. Budget Consultation
3. Budget Strategy and Speech
If an individual is an resident in Canada, they are taxed on what income? - ANSWER:
Worldwide income, including non Canadian sourced income (reported in CDN$)
Ties that are significant - ANSWER: 1. Dwellings: If a persona maintains his dwelling
in Canada (exception is renting while away)
2. Spouse/Partner: If a spouse/ partner stays in Canada. (exception if they were living
separate upon leaving)
3. Dependents: If individuals has dependents living in Canada while aboard.
Secondary ties that can be considered when deciding residency - ANSWER: 1.
Personal Property (i.e furniture, clothing cars)
2. Social Ties (memberships, religious organizations)
3. Economic ties (employment with Canadian employer, active involvement in a
Canadian bus, Canadian bank account, retirement savings plans, credit cards,
securities)
4. Landed immigration status/ work terms
5. hospitalization/ medical coverage from province
6.drivers license from a province
7. Seasonal dwelling/ leased dwelling
8. Canadian Passport
9. Memberships with unions/professional organizations
When is a corporation deemed to be a Canadian resident? - ANSWER: Common law
rules are based on central mind and management of BOD, i.e where Board makes
decisions
Sojourn Rule - ANSWER: A test for an individual who is already considered non
resident to see if they are deemed a resident. Under the rule, a sojourn is deemed a
