(no subject)
Learning tax law is hard enough, in the book I have this is complicated even moreso by errors in the examples, take for instance:
Mr. Jennings died recently and his only asset was an RRSP valued at $100,000.
1) If Mr. Jennings leaves the RRSP to his spouse, the RRSP will be transferred directly without any immediate tax consequences.
2) If Mr. Jennings leaves the RRSP to a dependant minor child aged 10, the $100,000 will be included in the child's income immediately, or the guardian of the child can elect to purchase a fixed term annuity, which will spread the proceeds evenly over the 8 years until the child is no longer a minor. The minor will pay tax on the amount received each year. In either case no income will be included for Mr. Brown on the RRSP
3) If Mr. Jennings leaves the RRSP to a dependant infirm child, the RRSP will be transferred to the child's RRSP with no immediate tax consequences to Mr. Brown or the child. The child will only be taxed when the RRSP s are withdrawn from the plan.
It's only a simple typo but when you are trying to retain information and tax law has so many little tricks to it, you don't want to be scrambling around the pages looking for a mention of a Mr. Brown to see who he is and how he fits into this scenario.
Mr. Jennings died recently and his only asset was an RRSP valued at $100,000.
1) If Mr. Jennings leaves the RRSP to his spouse, the RRSP will be transferred directly without any immediate tax consequences.
2) If Mr. Jennings leaves the RRSP to a dependant minor child aged 10, the $100,000 will be included in the child's income immediately, or the guardian of the child can elect to purchase a fixed term annuity, which will spread the proceeds evenly over the 8 years until the child is no longer a minor. The minor will pay tax on the amount received each year. In either case no income will be included for Mr. Brown on the RRSP
3) If Mr. Jennings leaves the RRSP to a dependant infirm child, the RRSP will be transferred to the child's RRSP with no immediate tax consequences to Mr. Brown or the child. The child will only be taxed when the RRSP s are withdrawn from the plan.
It's only a simple typo but when you are trying to retain information and tax law has so many little tricks to it, you don't want to be scrambling around the pages looking for a mention of a Mr. Brown to see who he is and how he fits into this scenario.