Certified Financial Planner (CFP) Practice Exam · Question
Scenario 33: What is the primary tax treatment of contributions to a Registered Disability Savings Plan (RDSP) in Canada?
Contributions to an RDSP are not tax-deductible. However, investment income grows tax-deferred, and withdrawals are not taxable to the beneficiary. The correct
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Question: Scenario 33: What is the primary tax treatment of contributions to a Registered Disability Savings Plan (RDSP) in Canada?
Answer options:
- Contributions are tax-deductible. ✅ Contributions are not tax-deductible, but investment growth is tax-deferred and withdrawals are tax-free.
- Contributions are matched dollar-for-dollar by the government.
- Investment income is fully taxable each year.
Correct answer: Contributions are not tax-deductible, but investment growth is tax-deferred and withdrawals are tax-free.
Explanation: Contributions to an RDSP are not tax-deductible. However, investment income grows tax-deferred, and withdrawals are not taxable to the beneficiary. The correct answer is "Contributions are not tax-deductible, but investment growth is tax-deferred and withdrawals are tax-free.". This capacity-fill scenario 33 reinforces the same competency for the cfp bank and follows the certified explanation standard.
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