Certified Financial Planner (CFP) Practice Exam · Question
Which of the following statements regarding the RRIF minimum withdrawal rules is correct?
All RRIF withdrawals, including the mandatory minimum, are considered taxable income in the hands of the annuitant in the year they are received. This is a fund
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Question: Which of the following statements regarding the RRIF minimum withdrawal rules is correct?
Answer options:
- The minimum withdrawal percentage decreases with age.
- The minimum withdrawal is calculated based on the RRIF balance at the end of the current year.
- The minimum withdrawal can be waived if the account holder has other significant income. ✅ The minimum withdrawal is reported as taxable income in the year it is received.
Correct answer: The minimum withdrawal is reported as taxable income in the year it is received.
Explanation: All RRIF withdrawals, including the mandatory minimum, are considered taxable income in the hands of the annuitant in the year they are received. This is a fundamental principle of RRIF taxation as outlined in the Income Tax Act.
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