Mr. and Mrs. Lee are both 68 years old. Mr. Lee has $60,000 in eligible pension income from his former employer, and Mrs. Lee has $10,000 in eligible pension income. To minimize their overall tax burden, what is the maximum amount of pension income Mr. Lee can split with Mrs. Lee?

Question: Mr. and Mrs. Lee are both 68 years old. Mr. Lee has $60,000 in eligible pension income from his former employer, and Mrs. Lee has $10,000 in eligible pension income. To minimize their overall tax burden, what is the maximum amount of pension income Mr. Lee can split with Mrs. Lee?

Answer options:

• $5,000
• $25,000 ✅ $30,000
• $35,000

Correct answer: $30,000

Explanation: Under the Income Tax Act, an individual can split up to 50% of their eligible pension income with their spouse or common-law partner, provided both are 65 or older. Therefore, Mr. Lee can split a maximum of 50% of his $60,000 pension income, which is $30,000, to equalize their incomes for tax purposes and potentially lower their overall tax payable.