Canada Revenue Agency (CRA) Income Practice Questions
The free Canada Revenue Agency (CRA) questions that deal with income, with answers and explanations. The full bank and the timed practice test cover every topic the exam asks about.
Question #1
What is the primary purpose of the Income Tax Act?
Correct answer: B
Explanation
The Income Tax Act is primarily focused on the collection of personal income tax in Canada.
Question #2
Which of the following is considered taxable income for an individual?
Correct answer: A
Explanation
Interest income is taxable, while gifts and inheritances are generally not taxable.
Question #3
In Canada, what is the tax rate for the first $49,020 of taxable income?
Correct answer: D
Explanation
The federal tax rate for the first $49,020 of taxable income is 15%.
Question #8
If a business incurs a loss, can it claim that loss against other income?
Correct answer: A
Explanation
Taxpayers can claim business losses against other sources of income in the same year.
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