Exam CIFC Topic 1 Question 188 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 188
Topic #: 1

Kerry's total income this past year was $100,000 and she claimed a tax deduction of $2,000. When the tax return is filed, what would be the federal tax payable when applying the following federal tax rates?
(Round to the closest whole dollar for the final answer.)

A. $17,472 B. $18,754 C. $24,000 D. $25,480

Suggested Answer: B Vote an answer

Explanation
Kerry's taxable income would be $98,000 ($100,000 - $2,000). Using the federal tax rates provided in the image, the first $48,535 of her income would be taxed at 15%, the next $48,534 at 20.5%, and the remaining
$931 at 26%. This would result in a total federal tax payable of $18,754. You can see the calculation in detail below:
Taxable Income
Marginal Tax Rate
Federal Tax Payable
$0 - $48,535
15%
$7,280.25
$48,536 - $97,069
20.5%
$9,934.47
$97,070 - $98,000
26%
$539.80
Total
$18,754.52
Note: The final answer is rounded to the closest whole dollar.
References: Canadian Investment Funds Course, Unit 8, Section 8.2; [4]

by Breenda at Jul 02, 2024, 07:25 PM

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Comments

mshah

2025-03-06 09:12:29

Option A should be the correct answer

upvoted 2 times

...

monetka3000

2024-09-30 10:30:11

Correct Explanation:
Kerry's taxable income is $98,000 ($100,000 - $2,000). Based on the tax brackets provided:

First $48,535 of her income is taxed at 15%:

$48,535 * 15% = $7,280.25
Next $48,535 (the portion from $48,536 to $97,069) is taxed at 20.5%:

$48,534 * 20.5% = $9,940.47
Remaining $931 (the portion from $97,070 to $98,000) is taxed at 26%:

$931 * 26% = $241.06
Total Federal Tax Payable:
$7,280.25 + $9,940.47 + $241.06 = $17,461.78
After rounding, the correct federal tax payable is approximately $17,462.

upvoted 3 times

KB2020

2025-05-15 18:58:38

Your calculator probably was broken dude...the results were wrong too. The the second bracket should be: $48535 * 20.5%=$9,949.68, and third should be $931 * 26%=$242.06 which leads to the total tax payable 7,280.25+9,949.68+242.06=$17,471.99 and Option A is the closest answer tooth's result.

upvoted 2 times

...

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