Which of the Following Statements Regarding GAAR Is True

question 2

Multiple Choice

Which of the following statements regarding GAAR is true?

• A)The purpose of GAAR is to catch tax evaders.
• B)When an avoidance transaction takes place, the anti-avoidance rule is automatically applied in all circumstances.
• C)Canada Revenue Agency states that "A transaction will not be an avoidance transaction if the taxpayer establishes that it is undertaken primarily for bona fide business, investment or family purposes."
• D)Individuals who organize their affairs in order to pay as little tax as possible will automatically be subject to GAAR.

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Definitions:

Probability Distribution

A mathematical function that provides the probabilities of occurrence of different possible outcomes for an experiment.

Chance

The occurrence of events in the absence of any obvious intention or cause.

Drink Tea

The action of consuming tea by drinking.

Drink Seltzer

Refers to the act of consuming seltzer water, a carbonated drink that may be flavored but does not contain alcohol.