Throughout the year, the Redwood Global Equity Fund generated the following outcomes: • $1.00 per unit of interest income from Canadian treasury bills $2.50 per unit of dividend income from foreign corporations $7.75 per unit of capital gains from the sale of Canadian corporations $6.50 per unit of capital gains from the sale of foreign corporations $2.00 per unit of capital losses from the sale of foreign corporations Given that the Redwood Global Equity Fund is structured as a mutual fund trust, which of the following statements is true? O Redwood can flow the foreign dividends to unitholders, who can then take advantage of the dividend gross-up and tax credit mechanism. Unitholders will receive $12.25 per unit of net capital gains from Redwood, of which only 50% is subject to tax. Redwood can distribute the $2.00 per unit of capital losses to unitholders, who can then use them to offset their capital gains. Since Redwood pays the tax on foreign income, it does not distribute dividend or capital gains income from foreign sources to unitholders. Marta is turning 71 years old this year. She will have to convert her registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF). Which of the following statements is TRUE? 0 She will be able to continue contributing to her RRIF and be subject to the same annual limits as her RRSP O When she converts her RRSP to a RRIF, she will incur a tax liability O She does not have to withdraw the minimum amount this year. O She will be subject to annual maximum withdrawal limits
Throughout the year, the Redwood Global Equity Fund generated the following outcomes: • $1.00 per unit of interest income from Canadian treasury bills $2.50 per unit of dividend income from foreign corporations $7.75 per unit of capital gains from the sale of Canadian corporations $6.50 per unit of capital gains from the sale of foreign corporations $2.00 per unit of capital losses from the sale of foreign corporations Given that the Redwood Global Equity Fund is structured as a mutual fund trust, which of the following statements is true? O Redwood can flow the foreign dividends to unitholders, who can then take advantage of the dividend gross-up and tax credit mechanism. Unitholders will receive $12.25 per unit of net capital gains from Redwood, of which only 50% is subject to tax. Redwood can distribute the $2.00 per unit of capital losses to unitholders, who can then use them to offset their capital gains. Since Redwood pays the tax on foreign income, it does not distribute dividend or capital gains income from foreign sources to unitholders. Marta is turning 71 years old this year. She will have to convert her registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF). Which of the following statements is TRUE? 0 She will be able to continue contributing to her RRIF and be subject to the same annual limits as her RRSP O When she converts her RRSP to a RRIF, she will incur a tax liability O She does not have to withdraw the minimum amount this year. O She will be subject to annual maximum withdrawal limits
Chapter1: Making Economics Decisions
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Transcribed Image Text:Throughout the year, the Redwood Global Equity Fund generated the following outcomes:
•
$1.00 per unit of interest income from Canadian treasury bills
$2.50 per unit of dividend income from foreign corporations
$7.75 per unit of capital gains from the sale of Canadian corporations
$6.50 per unit of capital gains from the sale of foreign corporations
$2.00 per unit of capital losses from the sale of foreign corporations
Given that the Redwood Global Equity Fund is structured as a mutual fund trust, which of the following statements is true?
O Redwood can flow the foreign dividends to unitholders, who can then take advantage of the dividend gross-up and tax credit
mechanism.
Unitholders will receive $12.25 per unit of net capital gains from Redwood, of which only 50% is subject to tax.
Redwood can distribute the $2.00 per unit of capital losses to unitholders, who can then use them to offset their capital gains.
Since Redwood pays the tax on foreign income, it does not distribute dividend or capital gains income from foreign sources to
unitholders.
Transcribed Image Text:Marta is turning 71 years old this year. She will have to convert her registered retirement savings plan (RRSP) to a registered retirement
income fund (RRIF). Which of the following statements is TRUE?
0
She will be able to continue contributing to her RRIF and be subject to the same annual limits as her RRSP
O When she converts her RRSP to a RRIF, she will incur a tax liability
O She does not have to withdraw the minimum amount this year.
O She will be subject to annual maximum withdrawal limits
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