TESTBANK #z
#z
Canadian Income Taxation 2022 2023 25th
#z #z #z #z
Canadian Edition Buckwold
#z #z #z
, Stuvia.com #z- #zThe #zMarketplace #zto #zBuy #zand #zSell #zyour
#zStudy # z MaterialStuvia.com#z- #zThe #zMarketplace #zto #zBuy #zand #zSell
#zyour #zStudy #zMaterial
Medconnoisseurlibraries.com
CHAPTER 1 #z
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
#z #z #z #z #z #z
Review #zQuestions
1. If income tax is imposed after profits have been determined, why is taxation relevant to
business decision making?
2. Most business decisions involve the evaluation of alternative courses of action. For
example, a marketing manager may be responsible for choosing a strategy for
establishing sales in new geographical territories. Briefly explain how the tax factor can
be an integral part of this decision.
3. What are the fundamental variables of the income tax system that decision-makers
should be familiar with so that they can apply tax issues to their areas of responsibility?
4. What is an ―after-tax‖ approach to decision making?
1
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#z$1.236 #z987
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, Stuvia.com #z- #zThe #zMarketplace #zto #zBuy #zand #zSell #zyour
#zStudy # z MaterialStuvia.com#z- #zThe #zMarketplace #zto #zBuy #zand #zSell
#zyour #zStudy #zMaterial
Medconnoisseurlibraries.com
Solutions #zto #zReview #zQuestions
R1-1 #zOnce #zprofit #zis #zdetermined, #zthe #zIncome #zTax #zAct #zdetermines #zthe #zamount #zof #zincome #ztax
#zthat #zresults. #zHowever, #zat #zall #zlevels #zof #zmanagement, #zalternative #zcourses #zof #zaction #zare
#zevaluated. # z In # z many # z cases, # z the # z choice # z of # z one # z alternative # z over # z the # z other
# z may # z affect # z both # z the # z amount #zand # z the # z timing # z of # z future # z taxes # z on # z income
# z generated # z from # z that # z activity. # z Therefore, # z the #zperson # z making # z those # z decisions
# z has # z a # z direct # z input # z into # z future # z after-tax # z cash # z flow. #zObviously, #zdecisions #zthat
#zreduce #zor #zpostpone #zthe #zpayment #zof #ztax #zaffect #zthe #zultimate #zreturn # z on # z investment
# z and, # z in # z turn, # z the # z value # z of # z the # z enterprise. # z Including # z the # z tax # z variable # z as # z a
# z part #zof #zthe #zformal #zdecision #zprocess #zwill #zultimately #zlead #zto #zimproved #zafter-tax #zcash
#zflow.
R1-2 #zExpansion #zcan #zbe #zachieved #zin #znew #zgeographic #zareas #zthrough #zdirect #zselling, #zor #zby
# z establishing #za #zformal #zpresence #zin #zthe #znew #zterritory #zwith #za #zbranch #zoffice #zor #za
#zseparate #zcorporation. #zThe #znew #zterritories #zmay #zalso #zcross #zprovincial #zor #zinternational
#zboundaries. #zProvincial #zincome #ztax #zrates #zvary #zamongst #zthe #zprovinces. #zThe #zamount #zof
#zincome #zthat #zis #zsubject #zto #ztax #zin #zthe #znew #zprovince #zwill #zbe #zdifferent #zfor #zeach #zof #zthe
#zthree #zalternatives #zmentioned #zabove. #zFor #zexample, #zwith #zdirect #zselling, #znone #zof #zthe
#zincome #zis #ztaxed #zin #zthe #znew #zprovince, #zbut #zwith #za #zseparate #zcorporation, #zall #zof #zthe
#zincome #zis #ztaxed #zin #zthe #znew #zprovince. #zBecause # z the # z tax # z cost # z is # z different # z in
# z each # z case, # z taxation # z is # z a #zrelevant # z part # z of # z the # z decision #zand #zmust #zbe #zincluded
#zin #zany #zcost-benefit #zanalysis #zthat #zcompares #zthe # z three #zalternatives # z [Reg. #z400-402.1].
R1-3 #zA #zbasic #zunderstanding #zof #zthe #zfollowing #zvariables #zwill #zsignificantly #zstrengthen #za
#zdecision #zmaker's #zability #zto #zapply #ztax #zissues #zto #ztheir #zarea #zof #zresponsibility.
Types #zof #zIncome - Employment, #zBusiness, #zProperty, #zCapital
gains #zTaxable #zEntities -
#z Individuals, #zCorporations, #zTrusts
Alternative #zBusiness - Corporation, #zProprietorship, #zPartnership, #zLimited
Structures partnership, #zJoint #zarrangement, #zIncome #ztrust
#z Tax #zJurisdictions - # z Federal, #zProvincial, #zForeign
R1-4 #zAll #zcash #zflow #zdecisions, #zwhether #zrelated #zto #zrevenues, #zexpenses, #zasset #zacquisitions #zor
#zdivestitures, #zor #zdebt #zand #zequity #zrestructuring, #zwill #zimpact #zthe #zamount #zand #ztiming #zof
#zthe #ztax #zcost. # z Therefore, # z cash # z flow # z exists # z only # z on # z an # z after # z tax # z basis, # z and,
# z the # z tax # z impacts # z whether #zor #znot #zthe #zultimate #zresult #zof #zthe #zdecision #zis #zsuccessful.
#zAn #zafter-tax #zapproach #zto #zdecision- #zmaking #zrequires #zeach #zdecision-maker #zto #zthink
#z"after-tax" #zfor #zevery #zdecision #zat #zthe #ztime #zthe #zdecision #zis #zbeing #zmade, #zand, #zto
#zconsider #zalternative #zcourses #zof #zaction #zto #zminimize #zthe #ztax #zcost, #zin #zthe #zsame #zway
#zthat #zdecisions #zare #zmade #zregarding #zother #ztypes #zof #zcosts.
Failure #zto #zapply #zan #zafter-tax #zapproach #zat #zthe #ztime #zthat # z decisions #zare #zmade #zmay
#zprovide # z inaccurate #zinformation #zfor #zevaluation, #zand, #zresult #zin #za #zpermanently
#zinefficient #ztax #zstructure.
2
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#z$1.236 #z987
Distribution #zof #zthis #zdocument #zis #zillegal extra #zper
, Stuvia.com #z- #zThe #zMarketplace #zto #zBuy #zand #zSell #zyour
#zStudy # z MaterialSu
tvia.com# z - #zThe #zMarketplace #zto #zBuy #zand #zSell
Medconnoisseurlibraries.com #z#zyour #zStudy # z MaterialStuvia.com #z- #zThe #zMarketplace #zto
Buy #zand #zSell #zyour #zStudy #zMaterial
CHAPTER 2 #z
FUNDAMENTALS OF TAX PLANNING #z #z #z
Review #zQuestions
1. ―Tax #zplanning #zand #ztax #zavoidance #zmean #zthe #zsame #zthing.‖ #zIs #zthis #zstatement #ztrue? #zExplain.
2. What #zdistinguishes #ztax #zevasion #zfrom #ztax #zavoidance #zand #ztax #zplanning?
3. Does #zCanada #zRevenue #zAgency #zdeal #zwith #zall #ztax #zavoidance #zactivities #zin #zthe #zsame
#zway? #zExplain.
4. The #zpurpose #zof #ztax #zplanning #zis #zto #zreduce #zor #zdefer #zthe #ztax #zcosts #zassociated #zwith
#zfinancial #ztransactions. #zWhat #zare #zthe #zgeneral #ztypes #zof #ztax #zplanning #zactivities? #zBriefly
#zexplain #zhow #zeach #zof #zthem #zmay #zreduce #zor #zdefer #zthe #ztax #zcost.
5. ―It #zis #zalways #zbetter #zto #zpay #ztax #zlater #zrather #zthan #zsooner.‖ #zIs #zthis #zstatement #ztrue? #zExplain.
6. When # z corporate # z tax # z rates # z are # z 13% # z and # z tax # z rates # z for # z individuals # z are
# z 40%, # z is # z it # z always #zbetter #zfor #zthe #zindividual #zto #ztransfer #ztheir #zbusiness #zto #za
#zcorporation?
7. ―As #zlong #zas #zall #zof #zthe #zincome #ztax #zrules #zare #zknown, #za #ztax #zplan #zcan #zbe
#zdeveloped #zwith #zcertainty.‖ #zIs #zthis #zstatement #ztrue? #zExplain.
8. What #zbasic #zskills #zare #zrequired #zto #zdevelop #za #zgood #ztax #zplan?
9. An #zentrepreneur #zis #zdeveloping #za #znew #zbusiness #zventure #zand #zis #zplanning #zto #zraise
#zequity #zcapital #zfrom #zindividual #zinvestors. #zTheir #zadviser #zindicates #zthat #zthe #zventure
#zcould #zbe #zstructured #zas #za #zcorporation #z(i.e., #zshares #zare #zissued #zto #zthe #zinvestors) #zor
#zas #za #zlimited #zpartnership # z (i.e., # z partnership # z units # z are # z sold). # z Both # z structures
# z provide # z limited # z liability # z for #zthe #zinvestors. #zShould #zthe #zentrepreneur #zconsider #zthe
#ztax #zpositions #zof #zthe #zindividual #zinvestors? # z Explain. # z Without # z dealing # z with
# z specific # z tax # z rules, # z what # z general # z tax # z factors #zshould #zan #zinvestor #zconsider
#zbefore #zmaking #zan #zinvestment?
10. What #zis #za #ztax #zavoidance #ztransaction?
11. ―If #za #ztransaction #z(or #za #zseries #zof #ztransactions) #zthat #zresults #zin #za #ztax #zbenefit #zwas #znot
# z undertaken #zprimarily #zfor #zbona #zfide #zbusiness, #zinvestment, #zor #zfamily #zpurposes, #zthe
#zgeneral #zanti-avoidance # z rule #zwill #zapply #zand #zeliminate #zthe #ztax # z benefit.‖ #zIs #zthis
#zstatement # z true? #zExplain.
Downloaded #zby: #zRN200 #z| #
Page #z3 #zof
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# #z987 W t#z to #zearn
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#z
Canadian Income Taxation 2022 2023 25th
#z #z #z #z
Canadian Edition Buckwold
#z #z #z
, Stuvia.com #z- #zThe #zMarketplace #zto #zBuy #zand #zSell #zyour
#zStudy # z MaterialStuvia.com#z- #zThe #zMarketplace #zto #zBuy #zand #zSell
#zyour #zStudy #zMaterial
Medconnoisseurlibraries.com
CHAPTER 1 #z
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
#z #z #z #z #z #z
Review #zQuestions
1. If income tax is imposed after profits have been determined, why is taxation relevant to
business decision making?
2. Most business decisions involve the evaluation of alternative courses of action. For
example, a marketing manager may be responsible for choosing a strategy for
establishing sales in new geographical territories. Briefly explain how the tax factor can
be an integral part of this decision.
3. What are the fundamental variables of the income tax system that decision-makers
should be familiar with so that they can apply tax issues to their areas of responsibility?
4. What is an ―after-tax‖ approach to decision making?
1
Downloaded #zby: #zdestine465 #z| #
Page #z1 #zof
Want #zto #zearn
#z$1.236 #z987
Distribution #zof #zthis #zdocument #zis #zillegal extra #zper
, Stuvia.com #z- #zThe #zMarketplace #zto #zBuy #zand #zSell #zyour
#zStudy # z MaterialStuvia.com#z- #zThe #zMarketplace #zto #zBuy #zand #zSell
#zyour #zStudy #zMaterial
Medconnoisseurlibraries.com
Solutions #zto #zReview #zQuestions
R1-1 #zOnce #zprofit #zis #zdetermined, #zthe #zIncome #zTax #zAct #zdetermines #zthe #zamount #zof #zincome #ztax
#zthat #zresults. #zHowever, #zat #zall #zlevels #zof #zmanagement, #zalternative #zcourses #zof #zaction #zare
#zevaluated. # z In # z many # z cases, # z the # z choice # z of # z one # z alternative # z over # z the # z other
# z may # z affect # z both # z the # z amount #zand # z the # z timing # z of # z future # z taxes # z on # z income
# z generated # z from # z that # z activity. # z Therefore, # z the #zperson # z making # z those # z decisions
# z has # z a # z direct # z input # z into # z future # z after-tax # z cash # z flow. #zObviously, #zdecisions #zthat
#zreduce #zor #zpostpone #zthe #zpayment #zof #ztax #zaffect #zthe #zultimate #zreturn # z on # z investment
# z and, # z in # z turn, # z the # z value # z of # z the # z enterprise. # z Including # z the # z tax # z variable # z as # z a
# z part #zof #zthe #zformal #zdecision #zprocess #zwill #zultimately #zlead #zto #zimproved #zafter-tax #zcash
#zflow.
R1-2 #zExpansion #zcan #zbe #zachieved #zin #znew #zgeographic #zareas #zthrough #zdirect #zselling, #zor #zby
# z establishing #za #zformal #zpresence #zin #zthe #znew #zterritory #zwith #za #zbranch #zoffice #zor #za
#zseparate #zcorporation. #zThe #znew #zterritories #zmay #zalso #zcross #zprovincial #zor #zinternational
#zboundaries. #zProvincial #zincome #ztax #zrates #zvary #zamongst #zthe #zprovinces. #zThe #zamount #zof
#zincome #zthat #zis #zsubject #zto #ztax #zin #zthe #znew #zprovince #zwill #zbe #zdifferent #zfor #zeach #zof #zthe
#zthree #zalternatives #zmentioned #zabove. #zFor #zexample, #zwith #zdirect #zselling, #znone #zof #zthe
#zincome #zis #ztaxed #zin #zthe #znew #zprovince, #zbut #zwith #za #zseparate #zcorporation, #zall #zof #zthe
#zincome #zis #ztaxed #zin #zthe #znew #zprovince. #zBecause # z the # z tax # z cost # z is # z different # z in
# z each # z case, # z taxation # z is # z a #zrelevant # z part # z of # z the # z decision #zand #zmust #zbe #zincluded
#zin #zany #zcost-benefit #zanalysis #zthat #zcompares #zthe # z three #zalternatives # z [Reg. #z400-402.1].
R1-3 #zA #zbasic #zunderstanding #zof #zthe #zfollowing #zvariables #zwill #zsignificantly #zstrengthen #za
#zdecision #zmaker's #zability #zto #zapply #ztax #zissues #zto #ztheir #zarea #zof #zresponsibility.
Types #zof #zIncome - Employment, #zBusiness, #zProperty, #zCapital
gains #zTaxable #zEntities -
#z Individuals, #zCorporations, #zTrusts
Alternative #zBusiness - Corporation, #zProprietorship, #zPartnership, #zLimited
Structures partnership, #zJoint #zarrangement, #zIncome #ztrust
#z Tax #zJurisdictions - # z Federal, #zProvincial, #zForeign
R1-4 #zAll #zcash #zflow #zdecisions, #zwhether #zrelated #zto #zrevenues, #zexpenses, #zasset #zacquisitions #zor
#zdivestitures, #zor #zdebt #zand #zequity #zrestructuring, #zwill #zimpact #zthe #zamount #zand #ztiming #zof
#zthe #ztax #zcost. # z Therefore, # z cash # z flow # z exists # z only # z on # z an # z after # z tax # z basis, # z and,
# z the # z tax # z impacts # z whether #zor #znot #zthe #zultimate #zresult #zof #zthe #zdecision #zis #zsuccessful.
#zAn #zafter-tax #zapproach #zto #zdecision- #zmaking #zrequires #zeach #zdecision-maker #zto #zthink
#z"after-tax" #zfor #zevery #zdecision #zat #zthe #ztime #zthe #zdecision #zis #zbeing #zmade, #zand, #zto
#zconsider #zalternative #zcourses #zof #zaction #zto #zminimize #zthe #ztax #zcost, #zin #zthe #zsame #zway
#zthat #zdecisions #zare #zmade #zregarding #zother #ztypes #zof #zcosts.
Failure #zto #zapply #zan #zafter-tax #zapproach #zat #zthe #ztime #zthat # z decisions #zare #zmade #zmay
#zprovide # z inaccurate #zinformation #zfor #zevaluation, #zand, #zresult #zin #za #zpermanently
#zinefficient #ztax #zstructure.
2
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#z$1.236 #z987
Distribution #zof #zthis #zdocument #zis #zillegal extra #zper
, Stuvia.com #z- #zThe #zMarketplace #zto #zBuy #zand #zSell #zyour
#zStudy # z MaterialSu
tvia.com# z - #zThe #zMarketplace #zto #zBuy #zand #zSell
Medconnoisseurlibraries.com #z#zyour #zStudy # z MaterialStuvia.com #z- #zThe #zMarketplace #zto
Buy #zand #zSell #zyour #zStudy #zMaterial
CHAPTER 2 #z
FUNDAMENTALS OF TAX PLANNING #z #z #z
Review #zQuestions
1. ―Tax #zplanning #zand #ztax #zavoidance #zmean #zthe #zsame #zthing.‖ #zIs #zthis #zstatement #ztrue? #zExplain.
2. What #zdistinguishes #ztax #zevasion #zfrom #ztax #zavoidance #zand #ztax #zplanning?
3. Does #zCanada #zRevenue #zAgency #zdeal #zwith #zall #ztax #zavoidance #zactivities #zin #zthe #zsame
#zway? #zExplain.
4. The #zpurpose #zof #ztax #zplanning #zis #zto #zreduce #zor #zdefer #zthe #ztax #zcosts #zassociated #zwith
#zfinancial #ztransactions. #zWhat #zare #zthe #zgeneral #ztypes #zof #ztax #zplanning #zactivities? #zBriefly
#zexplain #zhow #zeach #zof #zthem #zmay #zreduce #zor #zdefer #zthe #ztax #zcost.
5. ―It #zis #zalways #zbetter #zto #zpay #ztax #zlater #zrather #zthan #zsooner.‖ #zIs #zthis #zstatement #ztrue? #zExplain.
6. When # z corporate # z tax # z rates # z are # z 13% # z and # z tax # z rates # z for # z individuals # z are
# z 40%, # z is # z it # z always #zbetter #zfor #zthe #zindividual #zto #ztransfer #ztheir #zbusiness #zto #za
#zcorporation?
7. ―As #zlong #zas #zall #zof #zthe #zincome #ztax #zrules #zare #zknown, #za #ztax #zplan #zcan #zbe
#zdeveloped #zwith #zcertainty.‖ #zIs #zthis #zstatement #ztrue? #zExplain.
8. What #zbasic #zskills #zare #zrequired #zto #zdevelop #za #zgood #ztax #zplan?
9. An #zentrepreneur #zis #zdeveloping #za #znew #zbusiness #zventure #zand #zis #zplanning #zto #zraise
#zequity #zcapital #zfrom #zindividual #zinvestors. #zTheir #zadviser #zindicates #zthat #zthe #zventure
#zcould #zbe #zstructured #zas #za #zcorporation #z(i.e., #zshares #zare #zissued #zto #zthe #zinvestors) #zor
#zas #za #zlimited #zpartnership # z (i.e., # z partnership # z units # z are # z sold). # z Both # z structures
# z provide # z limited # z liability # z for #zthe #zinvestors. #zShould #zthe #zentrepreneur #zconsider #zthe
#ztax #zpositions #zof #zthe #zindividual #zinvestors? # z Explain. # z Without # z dealing # z with
# z specific # z tax # z rules, # z what # z general # z tax # z factors #zshould #zan #zinvestor #zconsider
#zbefore #zmaking #zan #zinvestment?
10. What #zis #za #ztax #zavoidance #ztransaction?
11. ―If #za #ztransaction #z(or #za #zseries #zof #ztransactions) #zthat #zresults #zin #za #ztax #zbenefit #zwas #znot
# z undertaken #zprimarily #zfor #zbona #zfide #zbusiness, #zinvestment, #zor #zfamily #zpurposes, #zthe
#zgeneral #zanti-avoidance # z rule #zwill #zapply #zand #zeliminate #zthe #ztax # z benefit.‖ #zIs #zthis
#zstatement # z true? #zExplain.
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