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Quiz: RRSP contributions and the deduction limit

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1 How is new RRSP deduction room for a year determined? 18% of the current year's earned income, up to the RRSP dollar limit 18% of the previous year's earned income, up to the RRSP dollar limit for the year 18% of the previous year's total income, up to the RRSP dollar limit The RRSP dollar limit, regardless of income

Answer key unconfirmed — rests on 3 unverified claims.

2 A taxpayer contributed in February and asks which year he can deduct it for. The current year only Whichever year he chooses, at any point in the year The preceding year only A contribution in the first 60 days of a year may be deducted for the preceding tax year or for the current one

Answer key unconfirmed — rests on 2 unverified claims.

3 What is the position on over-contributing to an RRSP? There is an annual buffer that resets each year Excess contributions are simply refused by the issuer There is a cumulative lifetime buffer, available only from age 19, and excess beyond it attracts a penalty tax of 1% per month for each month it remains in the plan Any excess immediately attracts penalty tax

Answer key unconfirmed — rests on 4 unverified claims.

4 A taxpayer contributed to a spousal RRSP and her spouse withdrew from it the following year. What may follow? Where the withdrawal falls within a defined period after the contribution, it may be taxed in the contributor's hands rather than the annuitant's Nothing — the withdrawal is taxed to the annuitant The withdrawal is taxed to both, split equally The contribution is reversed and the deduction denied

Answer key unconfirmed — rests on 1 unverified claim.

5 A taxpayer missed a Home Buyers' Plan repayment. What happens? Interest is charged on the missed amount The missed repayment is included in income for the year the repayment was due The full outstanding balance becomes immediately taxable The repayment period is extended by one year

Answer key unconfirmed — rests on 2 unverified claims.

6 A taxpayer withdrew from her RRSP, tax was withheld, and she believes the matter is closed. Incorrect — the withholding is an instalment against the liability determined on the return Incorrect — the withdrawal is not taxable at all Correct, provided the withdrawal was under a threshold Correct — the withholding is the final tax on the withdrawal

Answer key unconfirmed — rests on 2 unverified claims.

7 By when must an RRSP be wound up? There is no outside date while the annuitant has earned income By the end of the year in which the annuitant turns 65 By the annuitant's 71st birthday By the end of the year in which the annuitant turns 71, converting to a RRIF or an annuity or being withdrawn

Answer key unconfirmed — rests on 4 unverified claims.

Unanswered questions are marked wrong. There is no partial credit.