Test Bank - Intermediate Accounting 18th Edition by Kieso, Weygandt and Warfield, All 23 Chapters Covered, Verified Latest Edition

SOLUTION MANUAL
Canadian Income Taxation 26th Edition
by William Buckwold, All Chapters 1 - 23

,TABLE OF CONTENTS
q q




Chapter1qTaxation-ItsqRoleqinqDecisionqMaking

Chapter2qFundamentalsqofqTaxqPlanning

Chapterq3qLiabilityqforqTax,qIncomeqDetermination,qandqAdministrationqofqtheqIncomeqTaxqSystem

Chapterq4qIncomeqfromqEmployment

Chapterq5qIncomeqfromqBusiness

Chapterq6qTheqAcquisition,qUse,qandqDisposalqofqDepreciableqProperty

Chapter7qIncomeqfromqProperty

Chapter8qGainsqandqLossesqonqtheqDispositionqofqCapitalqProperty-CapitalqGains

Chapterq9qOtherqIncome,qOtherqDeductions,qandqSpecialqRulesqforqCompletingqNetqIncomeqforqTaxqPurposes

Chapterq10qIndividuals:qDeterminationqofqTaxableqIncomeqandqTaxesqPayable

Chapterq11qCorporations-AnqIntroduction

Chapterq12qOrganization,qCapitalqStructures,qandqIncomeqDistributionsqofqCorporations

Chapterq13qTheqCanadian-ControlledqPrivateqCorporation

Chapterq14qMultipleqCorporationsqandqTheirqReorganization

Chapterq15qPartnerships

Chapterq16qLimitedqPartnershipsqandqJointqVentures

Chapterq17qTrusts

Chapterq18qBusinessqAcquisitionsqandqDivestitures-AssetsqversusqShares

Chapterq19qBusinessqAcquisitionsqandqDivestitures-Tax-DeferredqSales

Chapterq20qDomesticqandqInternationalqBusinessqExpansion

Chapterq21qTaxqAspectsqofqCorporateqFinancing

Chapterq22qIntroductionqtoqGST/HST

Chapterq23qBusinessqValuations

, CHAPTERq1

TAXATION―qITSqROLEqINqBUSINESSqDECISIONqMAKING

ReviewqQuestions

1. Ifqincomeqtaxqisqimposedqafterqprofitsqhaveqbeenqdetermined,qwhyqisqtaxationqrelevantqtoqbusinessq
decisionqmaking?

2. Mostqbusinessqdecisionsqinvolveqtheqevaluationqofqalternativeqcoursesqofqaction.qForqexample,qaqm
arketingqmanagerqmayqbeqresponsibleqforqchoosingqaqstrategyqforqestablishingqsalesqinqnewqgeogra
phicalqterritories.qBrieflyqexplainqhowqtheqtaxqfactorqcanqbeqanqintegralqpartqofqthisqdecision.

3. Whatqareqtheqfundamentalqvariablesqofqtheqincomeqtaxqsystemqthatqdecision-
makersqshouldqbeqfamiliarqwithqsoqthatqtheyqcanqapplyqtaxqissuesqtoqtheirqareasqofqresponsibility?

4. Whatqisqanq―after-tax‖qapproachqtoqdecisionqmaking?

SolutionsqtoqReviewqQuestions

R1-
1qOnceqprofitqisqdetermined,qtheqIncomeqTaxqActqdeterminesqtheqamountqofqincomeqtaxqthatqresults.
qHowever,qatqallqlevelsqofqmanagement,qalternativeqcoursesqofqactionqareqevaluated.qInqmanyqcases,qt

heqchoiceqofqoneqalternativeqoverqtheqotherqmayqaffectqbothqtheqamountqandqtheqtimingqofqfutureqtax
esqonqincomeqgeneratedqfromqthatqactivity.qTherefore,qtheqpersonqmakingqthoseqdecisionsqhasqaqdire
ctqinputqintoqfutureqafter-
taxqcashq flow.qObviously,qdecisionsqthatqreduceqorqpostponeqtheqpaymentqofqtaxqaffectqthequltimate
qreturnqonqinvestmentqand,qinqturn,qtheqvalueqofqtheqenterprise.qIncludingqtheqtaxqvariableqasqaqpartqo

fqtheqformalqdecisionqprocessqwillqultimatelyqleadqtoqimprovedqafter-taxqcashqflow.

R1-
2qExpansionqcanqbeqachievedqinqnewqgeographicqareasqthroughqdirectqselling,qorqbyqestablishingqaqf
ormalqpresenceqinqtheqnewqterritoryqwithqaqbranchqofficeqorqaqseparateqcorporation.qTheqnewqterritor
iesqmayqalsoqcrossqprovincialqorqinternationalqboundaries.qProvincialqincomeqtaxqratesqvaryqamongs
tqtheqprovinces.qTheqamountqofqincomeqthatqisqsubjectqtoqtaxqinqtheqnewqprovinceqwillqbeqdifferentqf
orqeachqofqtheqthreeqalternativesqmentionedqabove.qForqexample,qwithqdirectqselling,qnoneqofqtheqinc
omeqisqtaxedqinqtheqnewqprovince,qbutqwithqaqseparateqcorporation,qallqofqtheqincomeqisqtaxedqinqthe
qnewqprovince.qBecauseqtheqtaxqcostqisqdifferentqinqeachqcase,qtaxationqisqaqrelevantqpartqofqtheqdeci

sionqandqmustqbeqincludedqinqanyqcost-
benefitqanalysisqthatqcomparesqtheqthreeqalternativesq[Reg.q400-402.1].

R1-
3qAqbasicqunderstandingqofqtheqfollowingqvariablesqwillqsignificantlyqstrengthenqaqdecisionqmaker's
qabilityqtoqapplyqtaxqissuesqtoqtheirqareaqofq responsibility.



TypesqofqIncome - Employment,qBusiness,qProperty,qCapitalqgains

TaxableqEntities - Individuals,qCorporations,qTrusts

, AlternativeqBusiness - Corporation,qProprietorship,qPartnership,qLimited
Structures partnership,qJointqarrangement,qIncomeqtrust

TaxqJurisdictions - Federal,qProvincial,qForeign

R1-
4qAllqcashqflowqdecisions,qwhetherqrelatedqtoqrevenues,qexpenses,qassetqacquisitionsqorqdivestitures,
qorqdebtqandqequityqrestructuring,qwillqimpactqtheqamountqandqtimingqofqtheqtaxqcost.q Therefore,q cas

hq flowq existsq onlyq onq anq afterq taxq basis,q and,q theq taxq impactsq whetherqorqnotqthequltimateqresultqofq
theqdecisionqisqsuccessful.qAnqafter-taxqapproachqtoqdecision-makingqrequiresqeachqdecision-
makerqtoqthinkq"after-
tax"qforqeveryqdecisionqatqtheqtimeqtheqdecisionqisqbeingqmade,qand,qtoqconsiderqalternativeqcoursesq
ofqactionqtoqminimizeqtheqtaxqcost,qinqtheqsameqwayqthatqdecisionsqareqmadeqregardingqotherqtypesqo
fqcosts.

Failureq toq applyq anq after-
taxq approachq atq theq timeq thatq decisionsq areq madeq mayq provideqinaccurateqinformationqforqevaluation,qand,qr
esultqinqaqpermanentlyqinefficientqtaxqstructure.




CHAPTERq2

FUNDAMENTALSqOFqTAXqPLANNING

ReviewqQuestions

1. ―Taxqplanningqandqtaxqavoidanceqmeanqtheqsameqthing.‖qIsqthisqstatementqtrue?qExplain.

2. Whatqdistinguishesqtaxqevasionqfromqtaxqavoidanceqandqtaxqplanning?

3. DoesqCanadaqRevenueqAgencyqdealqwithqallqtaxqavoidanceqactivitiesqinqtheqsameqway?qExplain.

4. Theqpurposeqofqtaxqplanningqisqtoqreduceqorqdeferqtheqtaxqcostsqassociatedqwithqfinancialqtransacti
ons.qWhatqareqtheqgeneralqtypesqofqtaxqplanningqactivities?qBrieflyqexplainqhowqeachqofqthemqmay
qreduceqorqdeferqtheqtaxqcost.



5. ―Itqisqalwaysqbetterqtoqpayqtaxqlaterqratherqthanqsooner.‖qIsqthisqstatementqtrue?qExplain.

6. Whenqcorporateqtaxqratesqareq13%qandqtaxqratesqforqindividualsqareq40%,qisqitqalwaysqbetterqforqth
eqindividualqtoqtransferqtheirqbusinessqtoqaqcorporation?

7. ―Asqlongqasqallqofqtheqincomeqtaxqrulesqareqknown,qaqtaxqplanqcanqbeqdevelopedqwithqcertainty.‖qI
sqthisqstatementqtrue?qExplain.

8. Whatqbasicqskillsqareqrequiredqtoqdevelopqaqgoodqtaxqplan?
9. Anqentrepreneurqisqdevelopingqaqnewqbusinessqventureqandqisqplanningqtoqraiseqequityqcapitalqfro
mqindividualqinvestors.qTheirqadviserqindicatesqthatqtheqventureqcouldqbeqstructuredqasqaqcorporati
onq(i.e.,qsharesqareqissuedqtoqtheqinvestors)qorqasqaqlimitedqpartnershipq (i.e.,q partnershipq unitsq areq