How is a $10,000 withdrawal from a registered retirement savings plan (RRSP) taxed?
A.
As regular income
B.
As a deduction against other income
C.
At a set rate of 30%
D.
Based on the type of investment income type
The Answer Is:
A
This question includes an explanation.
Explanation:
Withdrawals from an RRSP are taxed as regular income at the plan holder’s marginal tax rate, regardless of the type of income earned within the plan. The feedback from the document states:
"Contributions withdrawn from an RRSP are taxed as regular income at the plan holder’s marginal tax rate."
[Reference: Chapter 6 – Tax and Retirement PlanningLearning Domain: The Know Your Client Communication Process, , , ]
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