Test Bank For Byrd & Chen's Canadian Tax Principles, 2022-2023, (Volume 2) By Gary Donell, Clarence

Canadian Tax Principles, 2022-2023, Vol 2 (Byrd/Chen) (Answers at the end of each chapter)Chapter 1111.1 Online Exercises1) ITA 110.2 provides for a deduction of "lump-sum payments", for example a court ordered terminationbenefit. What tax policy objective is served by this provision?Answer: Such lump-sum payments often reflect compensation for services rendered over several years. The fact that it is received in a single year can result in significant portions of it being subject to income taxrates higher than would have been the case had it been received over the several years during which it wasearned. The deduction of such amounts provides the basis for an alternative income tax payable calculation which attempts to adjust the amount paid to the amount that would have been paid if the amount had actually been received over several years. The objective of such provisions is fairness or equity.Type: ESTopic: Lump-sum payments - ITA 110.22) The carryover periods for losses varies with the type of loss. Briefly describe the carryover periods thatthe ITA provides for the types of losses that it identifies.Answer: The carryover periods for the various types of losses identified in the Income Tax Act and covered in the text up to Chapter 11