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IFSE Institute CIFC Exam - Topic 10 Question 2 Discussion

Justin and Yvonne both open a Registered Education Savings Plan (RESP) for their daughter Grace. They plan to regularly contribute $1,000 per year until Grace reaches the age of 17.Which of the following statements relating to RESP is CORRECT?
A) Justin and Yvonne may contribute a combined lifetime maximum of $50,000 for Grace.
B) RESPs are attractive to Justin and Yvonne because they are tax-free investment plans.
C) There is an annual contribution limit of $2,500 that Justin and Yvonne can contribute to an RESP.
D) Contributions made by Justin and Yvonne are eligible for a tax deduction in the year they are contributed.

IFSE Institute CIFC Exam - Topic 10 Question 2 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 2
Topic #: 10
[All CIFC Questions]

Justin and Yvonne both open a Registered Education Savings Plan (RESP) for their daughter Grace. They plan to regularly contribute $1,000 per year until Grace reaches the age of 17.

Which of the following statements relating to RESP is CORRECT?

Show Suggested Answer Hide Answer
Suggested Answer: A

by Caitlin at Jun 12, 2025, 01:57 PM

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Phuong
8 months ago
Wait, are contributions really tax-deductible? That seems off.
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Truman
8 months ago
Totally agree, but I thought the annual limit was higher than $2,500?
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Rodolfo
8 months ago
A lifetime max of $50,000 is correct for RESPs.
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Nydia
9 months ago
RESPs are tax-free, that's a big plus for them!
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Myong
9 months ago
Just to clarify, the $50,000 is for the whole plan, not per year, right?
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Armando
9 months ago
I don't think contributions to an RESP are tax-deductible like RRSPs, but I could be wrong. I should double-check that.
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Tabetha
9 months ago
I feel like there was a question about annual limits in our practice tests, and I think it was $2,500, but I might be mixing it up with another account type.
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Penney
9 months ago
I remember that RESPs are tax-advantaged, but I can't recall if they are completely tax-free or if there are some conditions.
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Rolande
10 months ago
I think the lifetime maximum for contributions is $50,000, but I'm not entirely sure if that's for each parent or combined.
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Isreal
10 months ago
The key here is understanding the RESP rules and regulations. I'll focus on identifying the statement that accurately reflects the information provided in the question.
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Meaghan
10 months ago
Hmm, I'm a bit unsure about the contribution limits. I'll need to double-check the details on that before selecting an answer.
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Maryln
10 months ago
I'm pretty confident about this one. RESPs are tax-advantaged investment accounts for education savings, so option B is the correct answer.
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Denise
10 months ago
Okay, let me think this through. The question is asking about the correct statement regarding RESPs, and it provides some information about Justin and Yvonne's plan for their daughter Grace. I'll need to carefully review the answer options.
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Marylin
11 months ago
This question seems straightforward, but I want to make sure I understand the key details about RESPs before selecting an answer.
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Joesph
1 year ago
Wow, this is a tough one! I'm going to have to go with Option D and say that the contributions are eligible for a tax deduction. Wait, that can't be right - who would want to deduct contributions to an RESP? I'm so confused!
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Lisha
1 year ago
Actually, I believe Option B is the correct statement - RESPs are attractive because they are tax-free investment plans.
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Whitley
1 year ago
I think Option A is correct - Justin and Yvonne may contribute a combined lifetime maximum of $50,000 for Grace.
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Felice
1 year ago
I'm going with Option A. The lifetime contribution limit for an RESP is $50,000 per beneficiary.
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Kirk
1 year ago
I agree with you. Option A is the correct statement regarding RESP contributions.
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Ruth
1 year ago
I think Option B is also true. RESPs are tax-deferred, not tax-free.
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Tanesha
1 year ago
That's correct! The lifetime contribution limit for an RESP is $50,000 per beneficiary.
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Staci
1 year ago
You might be right, but I still think it's A because of the contribution limit.
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Isabella
1 year ago
I disagree, I believe it's B because RESPs are tax-free.
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Staci
1 year ago
I think the correct statement is A.
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Luisa
1 year ago
I think Option C is correct. There is an annual contribution limit of $2,500 per beneficiary that Justin and Yvonne can contribute to the RESP.
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Kenneth
1 year ago
Option B is correct. RESPs are tax-free investment plans that allow for tax-deferred growth and tax-free withdrawals for educational purposes.
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Barbra
1 year ago
D) Contributions made by Justin and Yvonne are eligible for a tax deduction in the year they are contributed.
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Shoshana
1 year ago
C) There is an annual contribution limit of $2,500 that Justin and Yvonne can contribute to an RESP.
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Reuben
1 year ago
Tarra: Definitely! Plus, the government provides grants to help boost the savings in the RESP.
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Tarra
1 year ago
User 2: That's great to know! It's a smart way to save for our daughter's education.
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Florencia
1 year ago
B) RESPs are attractive to Justin and Yvonne because they are tax-free investment plans.
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Tammara
1 year ago
A) Justin and Yvonne may contribute a combined lifetime maximum of $50,000 for Grace.
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Colene
1 year ago
User 1: Option B is correct. RESPs are tax-free investment plans that allow for tax-deferred growth and tax-free withdrawals for educational purposes.
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