Liam is a self-employed consultant. His net business income last year was $180,000. His spouse, Olivia, works part-time, earning $35,000 per year. Liam wants to implement a tax deferral strategy. Which of the following options would provide the most significant current year tax deferral for Liam?

Question: Liam is a self-employed consultant. His net business income last year was $180,000. His spouse, Olivia, works part-time, earning $35,000 per year. Liam wants to implement a tax deferral strategy. Which of the following options would provide the most significant current year tax deferral for Liam?

Answer options:

• Maximizing his TFSA contributions.
• Purchasing flow-through shares. ✅ Contributing the maximum allowable to his RRSP.
• Gifting funds to Olivia to invest in a non-registered account.

Correct answer: Contributing the maximum allowable to his RRSP.

Explanation: Contributing to an RRSP provides an immediate tax deduction, reducing Liam's current taxable income and deferring tax on both the contribution and investment growth until withdrawal. TFSA contributions offer tax-free growth but no upfront deduction. Flow-through shares offer deductions but are complex and higher risk. Gifting to Olivia to invest might lead to attribution.