CANADIAN TAX PRINCIPLES CHAPTER 4
ACTUAL EXAM PAPER QUESTIONS WITH
DETAILED VERIFIED ANSWERS A+
◉A qualified education loan must be used (blank) to pay for qualified
(blank) expenses. Answer: solely
education
◉Which of the following are true regarding an HSA, if the taxpayer is
an employee? (Check all that apply.) Answer: The taxpayer must have a
high-deductible health plan.
The taxpayer may have a separate disability insurance plan.
No permission is required from the IRS to establish the HSA.
◉When can a taxpayer deduct moving expenses? Answer: When a
taxpayer moves under an order for an active military transfer
◉Which of the following statements is correct regarding the
deductibility of self-employment tax for self-employed taxpayers?
Answer: Self-employed taxpayers can deduct the employer portion of
the self-employment tax they pay for AGI.
, ◉A taxpayer may deduct interest expense paid on qualified (blank)
loans where the proceeds were used for tuition, fees, books, and other
necessary expenses. The interest is deductible (blank) AGI. Answer:
education
for
◉Horatio and Maria are married and have three children. Horatio is self-
employed and pays health insurance premiums for himself and his
family. Which of the following situations would disqualify part or all of
the premium costs from being deductible for AGI? Answer: Maria has
an employer-sponsored health insurance plan available at work, but they
do not participate.
◉True or false: A qualified education loan may be incurred by the parent
of a child attending a qualified institution as long as that child is a
dependent. Answer: True
◉The penalty for ______ is deductible for AGI. Answer: early
withdrawal of a timed savings account
◉True or false: A taxpayer that has a Health Savings Account can also
be enrolled in Medicare. Answer: False
◉Which of the following statements are characteristics of alimony for
divorce decrees before 1/1/19? (Check all that apply.) Answer: Alimony
payments can NOT continue after the death of the recipient.
ACTUAL EXAM PAPER QUESTIONS WITH
DETAILED VERIFIED ANSWERS A+
◉A qualified education loan must be used (blank) to pay for qualified
(blank) expenses. Answer: solely
education
◉Which of the following are true regarding an HSA, if the taxpayer is
an employee? (Check all that apply.) Answer: The taxpayer must have a
high-deductible health plan.
The taxpayer may have a separate disability insurance plan.
No permission is required from the IRS to establish the HSA.
◉When can a taxpayer deduct moving expenses? Answer: When a
taxpayer moves under an order for an active military transfer
◉Which of the following statements is correct regarding the
deductibility of self-employment tax for self-employed taxpayers?
Answer: Self-employed taxpayers can deduct the employer portion of
the self-employment tax they pay for AGI.
, ◉A taxpayer may deduct interest expense paid on qualified (blank)
loans where the proceeds were used for tuition, fees, books, and other
necessary expenses. The interest is deductible (blank) AGI. Answer:
education
for
◉Horatio and Maria are married and have three children. Horatio is self-
employed and pays health insurance premiums for himself and his
family. Which of the following situations would disqualify part or all of
the premium costs from being deductible for AGI? Answer: Maria has
an employer-sponsored health insurance plan available at work, but they
do not participate.
◉True or false: A qualified education loan may be incurred by the parent
of a child attending a qualified institution as long as that child is a
dependent. Answer: True
◉The penalty for ______ is deductible for AGI. Answer: early
withdrawal of a timed savings account
◉True or false: A taxpayer that has a Health Savings Account can also
be enrolled in Medicare. Answer: False
◉Which of the following statements are characteristics of alimony for
divorce decrees before 1/1/19? (Check all that apply.) Answer: Alimony
payments can NOT continue after the death of the recipient.
