Calculate the Tax Difference Between a British Columbia Resident and a Quebec

question 8

Multiple Choice

Calculate the tax difference between a British Columbia resident and a Quebec resident both having $20,000 in interest income and $25,000 in capital gains. $\textbf{ Combined marginal tax rates for individuals in top provincial tax brackets }$

• A) British Columbia resident would pay $1,356.50 less than the Quebec resident.
• B) British Columbia resident would pay $1,356.50 more than the Quebec resident.
• C) British Columbia resident would pay $2,456.50 less than the Quebec resident.
• D) British Columbia resident would pay $2,456.50 more than the Quebec resident.
• E) There are no tax differences between the two tax payers.

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Definitions:

Cash

Currency and coins, along with funds in bank accounts and other forms of immediately available funds.

Accounting Equation

The foundation of double-entry bookkeeping, stating that assets are equal to the sum of liabilities and owner's equity: Assets = Liabilities + Owner's Equity.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing what the owners or shareholders own outright in the company.

Liabilities

Financial obligations a company owes to outside parties.