Canadian Income Taxation, 2023/2024:
N N N
PlanningandDecision Making N N N
26th Edition N N
By William Buckwold N N
CompleteChapterSolutions Manual are
N N N N
included (Ch 1 to 23)
L
N N N N N
A I
T
N
** Immediate Download
E
N N
D
** Swift Response
N N
F I
** All Chapters included
N N N
N
** Excel Solutions
O
N N
C
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
N N N N N N N N N
CHAPTER 1 N
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING N N N N N N
Review Questions
N
1. If income tax is imposed after profits have been determined, why is taxation relevant to
N N N N N N N N N N N N N N
business decision making?
N N N
2. Most business decisions involve the evaluation of alternative courses of action. For
N N N N N N N N N N N
example, a marketing manager may be responsible for choosing a strategy for establishing
N N N N N N N N N N N N N
sales in new geographical territories. Briefly explain how the tax factor can be an integral part
N N N N N N N N N N N N N N N N
of this decision.
N N N
3. What are the fundamental variables of the income tax system that decision-makers should be
N N N N N N N N N N N N N
familiar with so that they can apply tax issues to their areas of responsibility?
L
N N N N N N N N N N N N N N
A
4. What is an ―after-tax‖ approach to decision making?
N N N N N N N
T I
E N
I D
F
N
O
C
. 1
Instructor Solutions Manual Chapter One
N N N N
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed. N N N N N N N N N
Solutions to Review Questions N N N
R1-1 Once profit is determined, the Income Tax Act determines the amount of income tax that
N N N N N N N N N N N N N N N
results. However, at all levels of management, alternative courses of action are evaluated. In
N N N N N N N N N N N N N N
many cases, the choice of one alternative over the other may affect both the amount and the
N N N N N N N N N N N N N N N N N
timing of future taxes on income generated from that activity. Therefore, the person making
N N N N N N N N N N N N N N
those decisions has a direct input into future after-tax cash flow. Obviously, decisions that
N N N N N N N N N N N N N N
reduce or postpone the payment of tax affect the ultimate return on investment and, in turn,
N N N N N N N N N N N N N N N N
the value of the enterprise. Including the tax variable as a part of the formal decision process
N N N N N N N N N N N N N N N N N
will ultimately lead to improved after-tax cash flow.
N N N N N N N N
R1-2 Expansion can be achieved in new geographic areas through direct selling, or by establishing
N N N N N N N N N N N N N N
a formal presence in the new territory with a branch office or a separate corporation. The new
N N N N N N N N N N N N N N N N N
territories may also cross provincial or international boundaries. Provincial income tax rates
N N N N N N N N N N N N
vary amongst the provinces. The amount of income that is subject to tax in the new province
N N N N N N N N N N N N N N N N N
will be different for each of the three alternatives mentioned above. For example, with direct
N N N N N N N N N N N N N N N
selling, none of the income is taxed in the new province, but with a separate corporation, all
L
N N N N N N N N N N N N N N N N N
of the income is taxed in the new province. Because the tax cost is different in each case,
A
N N N N N N N N N N N N N N N N N N
taxation is a relevant part of the decision and must be included in any cost-benefit analysis that
N N N N N N N N N N N N N N N N N
I
compares the three alternatives [Reg. 400-402.1].
N N N N N N
T
N
R1-3 A basic understanding of the following variables will significantly strengthen a decision
N N N N N N N N N N N N
maker's ability to apply tax issues to their area of responsibility.
N N N N N N N N N N N
E
Types of Income - Employment, Business, Property, Capital gains
D
N N N N N N
I
Taxable Entities - Individuals, Corporations, Trusts
F
N N N N
N
Alternative Business N - Corporation, Proprietorship, Partnership, Limited N N N
Structures partnership, Joint arrangement, Income trust
O
N N N N N
Tax Jurisdictions - Federal, Provincial, Foreign
C
N N N
R1-4 All cash flow decisions, whether related to revenues, expenses, asset acquisitions or
N N N N N N N N N N N N
divestitures, or debt and equity restructuring, will impact the amount and timing of the tax
N N N N N N N N N N N N N N N
cost. Therefore, cash flow exists only on an after tax basis, and, the tax impacts whether or not
N N N N N N N N N N N N N N N N N N
the ultimate result of the decision is successful. An after-tax approach to decision-
N N N N N N N N N N N N N
making requires each decision-maker to think "after-tax" for every decision at the time the
N N N N N N N N N N N N N
decision is being made, and, to consider alternative courses of action to minimize the tax
N N N N N N N N N N N N N N N
cost, in the same way that decisions are made regarding other types of costs.
N N N N N N N N N N N N N N
Failure to apply an after-tax approach at the time that decisions are made may provide
N N N N N N N N N N N N N N
inaccurate information for evaluation, and, result in a permanently inefficient tax structure.
N N N N N N N N N N N N
. 2
Instructor Solutions Manual Chapter One
N N N N
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
N N N N N N N N N
CHAPTER 2 N
FUNDAMENTALS OF TAX PLANNING N N N
Review Questions
N
1. ―Tax planning and tax avoidance mean the same thing.‖ Is this statement true? Explain.
N N N N N N N N N N N N N
2. What distinguishes tax evasion from tax avoidance and tax planning?
N N N N N N N N N
3. Does Canada Revenue Agency deal with all tax avoidance activities in the same way?
N N N N N N N N N N N N N
Explain.
N
4. The purpose of tax planning is to reduce or defer the tax costs associated with financial
N N N N N N N N N N N N N N N
transactions. What are the general types of tax planning activities? Briefly explain how
N N N N N N N N N N N N N
each of them may reduce or defer the tax cost.
L
N N N N N N N N N N
A
5. ―It is always better to pay tax later rather than sooner.‖ Is this statement true? Explain.
N N N N N N N N N N N N N N N
T I
6. When corporate tax rates are 13% and tax rates for individuals are 40%, is it always better for
N N N N N N N N N N N N N N N N N
the individual to transfer their business to a corporation?
N
N N N N N N N N N
E
7. ―As long as all of the income tax rules are known, a tax plan can be developed with
N N N N N N N N N N N N N N N N N
certainty.‖ Is this statement true? Explain.
D
N N N N N N
I
8. What basic skills are required to develop a good tax plan?
N N N N N N N N N N
F
N
9. An entrepreneur is developing a new business venture and is planning to raise equity
N N N N N N N N N N N N N
capital from individual investors. Their adviser indicates that the venture could be
N N N N N N N N N N N N
O
structured as a corporation (i.e., shares are issued to the investors) or as a limited
N N N N N N N N N N N N N N N
partnership (i.e., partnership units are sold). Both structures provide limited liability for the
C
N N N N N N N N N N N N N
investors. Should the entrepreneur consider the tax positions of the individual investors?
N N N N N N N N N N N N
Explain. Without dealing with specific tax rules, what general tax factors should an investor
N N N N N N N N N N N N N N
consider before making an investment?
N N N N N
10. What is a tax avoidance transaction?
N N N N N
11. ―If a transaction (or a series of transactions) that results in a tax benefit was not undertaken
N N N N N N N N N N N N N N N N
primarily for bona fide business, investment, or family purposes, the general anti-
N N N N N N N N N N N N
avoidance rule will apply and eliminate the tax benefit.‖ Is this statement true? Explain.
N N N N N N N N N N N N N N
. 1
Instructor Solutions Manual Chapter Two
N N N N
N N N
PlanningandDecision Making N N N
26th Edition N N
By William Buckwold N N
CompleteChapterSolutions Manual are
N N N N
included (Ch 1 to 23)
L
N N N N N
A I
T
N
** Immediate Download
E
N N
D
** Swift Response
N N
F I
** All Chapters included
N N N
N
** Excel Solutions
O
N N
C
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
N N N N N N N N N
CHAPTER 1 N
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING N N N N N N
Review Questions
N
1. If income tax is imposed after profits have been determined, why is taxation relevant to
N N N N N N N N N N N N N N
business decision making?
N N N
2. Most business decisions involve the evaluation of alternative courses of action. For
N N N N N N N N N N N
example, a marketing manager may be responsible for choosing a strategy for establishing
N N N N N N N N N N N N N
sales in new geographical territories. Briefly explain how the tax factor can be an integral part
N N N N N N N N N N N N N N N N
of this decision.
N N N
3. What are the fundamental variables of the income tax system that decision-makers should be
N N N N N N N N N N N N N
familiar with so that they can apply tax issues to their areas of responsibility?
L
N N N N N N N N N N N N N N
A
4. What is an ―after-tax‖ approach to decision making?
N N N N N N N
T I
E N
I D
F
N
O
C
. 1
Instructor Solutions Manual Chapter One
N N N N
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed. N N N N N N N N N
Solutions to Review Questions N N N
R1-1 Once profit is determined, the Income Tax Act determines the amount of income tax that
N N N N N N N N N N N N N N N
results. However, at all levels of management, alternative courses of action are evaluated. In
N N N N N N N N N N N N N N
many cases, the choice of one alternative over the other may affect both the amount and the
N N N N N N N N N N N N N N N N N
timing of future taxes on income generated from that activity. Therefore, the person making
N N N N N N N N N N N N N N
those decisions has a direct input into future after-tax cash flow. Obviously, decisions that
N N N N N N N N N N N N N N
reduce or postpone the payment of tax affect the ultimate return on investment and, in turn,
N N N N N N N N N N N N N N N N
the value of the enterprise. Including the tax variable as a part of the formal decision process
N N N N N N N N N N N N N N N N N
will ultimately lead to improved after-tax cash flow.
N N N N N N N N
R1-2 Expansion can be achieved in new geographic areas through direct selling, or by establishing
N N N N N N N N N N N N N N
a formal presence in the new territory with a branch office or a separate corporation. The new
N N N N N N N N N N N N N N N N N
territories may also cross provincial or international boundaries. Provincial income tax rates
N N N N N N N N N N N N
vary amongst the provinces. The amount of income that is subject to tax in the new province
N N N N N N N N N N N N N N N N N
will be different for each of the three alternatives mentioned above. For example, with direct
N N N N N N N N N N N N N N N
selling, none of the income is taxed in the new province, but with a separate corporation, all
L
N N N N N N N N N N N N N N N N N
of the income is taxed in the new province. Because the tax cost is different in each case,
A
N N N N N N N N N N N N N N N N N N
taxation is a relevant part of the decision and must be included in any cost-benefit analysis that
N N N N N N N N N N N N N N N N N
I
compares the three alternatives [Reg. 400-402.1].
N N N N N N
T
N
R1-3 A basic understanding of the following variables will significantly strengthen a decision
N N N N N N N N N N N N
maker's ability to apply tax issues to their area of responsibility.
N N N N N N N N N N N
E
Types of Income - Employment, Business, Property, Capital gains
D
N N N N N N
I
Taxable Entities - Individuals, Corporations, Trusts
F
N N N N
N
Alternative Business N - Corporation, Proprietorship, Partnership, Limited N N N
Structures partnership, Joint arrangement, Income trust
O
N N N N N
Tax Jurisdictions - Federal, Provincial, Foreign
C
N N N
R1-4 All cash flow decisions, whether related to revenues, expenses, asset acquisitions or
N N N N N N N N N N N N
divestitures, or debt and equity restructuring, will impact the amount and timing of the tax
N N N N N N N N N N N N N N N
cost. Therefore, cash flow exists only on an after tax basis, and, the tax impacts whether or not
N N N N N N N N N N N N N N N N N N
the ultimate result of the decision is successful. An after-tax approach to decision-
N N N N N N N N N N N N N
making requires each decision-maker to think "after-tax" for every decision at the time the
N N N N N N N N N N N N N
decision is being made, and, to consider alternative courses of action to minimize the tax
N N N N N N N N N N N N N N N
cost, in the same way that decisions are made regarding other types of costs.
N N N N N N N N N N N N N N
Failure to apply an after-tax approach at the time that decisions are made may provide
N N N N N N N N N N N N N N
inaccurate information for evaluation, and, result in a permanently inefficient tax structure.
N N N N N N N N N N N N
. 2
Instructor Solutions Manual Chapter One
N N N N
, Buckwold, Kitunen, Roman and Iqbal, Canadian Income Taxation, 2023-2024 Ed.
N N N N N N N N N
CHAPTER 2 N
FUNDAMENTALS OF TAX PLANNING N N N
Review Questions
N
1. ―Tax planning and tax avoidance mean the same thing.‖ Is this statement true? Explain.
N N N N N N N N N N N N N
2. What distinguishes tax evasion from tax avoidance and tax planning?
N N N N N N N N N
3. Does Canada Revenue Agency deal with all tax avoidance activities in the same way?
N N N N N N N N N N N N N
Explain.
N
4. The purpose of tax planning is to reduce or defer the tax costs associated with financial
N N N N N N N N N N N N N N N
transactions. What are the general types of tax planning activities? Briefly explain how
N N N N N N N N N N N N N
each of them may reduce or defer the tax cost.
L
N N N N N N N N N N
A
5. ―It is always better to pay tax later rather than sooner.‖ Is this statement true? Explain.
N N N N N N N N N N N N N N N
T I
6. When corporate tax rates are 13% and tax rates for individuals are 40%, is it always better for
N N N N N N N N N N N N N N N N N
the individual to transfer their business to a corporation?
N
N N N N N N N N N
E
7. ―As long as all of the income tax rules are known, a tax plan can be developed with
N N N N N N N N N N N N N N N N N
certainty.‖ Is this statement true? Explain.
D
N N N N N N
I
8. What basic skills are required to develop a good tax plan?
N N N N N N N N N N
F
N
9. An entrepreneur is developing a new business venture and is planning to raise equity
N N N N N N N N N N N N N
capital from individual investors. Their adviser indicates that the venture could be
N N N N N N N N N N N N
O
structured as a corporation (i.e., shares are issued to the investors) or as a limited
N N N N N N N N N N N N N N N
partnership (i.e., partnership units are sold). Both structures provide limited liability for the
C
N N N N N N N N N N N N N
investors. Should the entrepreneur consider the tax positions of the individual investors?
N N N N N N N N N N N N
Explain. Without dealing with specific tax rules, what general tax factors should an investor
N N N N N N N N N N N N N N
consider before making an investment?
N N N N N
10. What is a tax avoidance transaction?
N N N N N
11. ―If a transaction (or a series of transactions) that results in a tax benefit was not undertaken
N N N N N N N N N N N N N N N N
primarily for bona fide business, investment, or family purposes, the general anti-
N N N N N N N N N N N N
avoidance rule will apply and eliminate the tax benefit.‖ Is this statement true? Explain.
N N N N N N N N N N N N N N
. 1
Instructor Solutions Manual Chapter Two
N N N N
