Canadian Income Taxation, 2023/2024:
b b b
Planning and Decision Making26b b b b
th Edition b
By William Buckwold
b b
Complete Chapter Solutions Manualar
b b b b
e included (Ch 1 to 23)
b b b b b
** Immediate Download
b b
** Swift Response
b b
** All Chapters included
b b b
** Excel Solutions
b b
, Buckwold,bKitunen,bRomanbandbIqbal,bCanadianbIncomebTaxation,b2023-2024bEd.
CHAPTER 1 b
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
b b b b b b
ReviewbQuestions
1. Ifbincomebtaxbisbimposedbafterbprofitsbhavebbeenbdetermined,bwhybisbtaxationbrelevantbtobb
usinessbdecisionbmaking?
2. Mostbbusinessbdecisionsbinvolvebthebevaluationbofbalternativebcoursesbofbaction.bForbexam
ple,babmarketingbmanagerbmaybbebresponsiblebforbchoosingbabstrategybforbestablishingbsal
esbinbnewbgeographicalbterritories.bBrieflybexplainbhowbthebtaxbfactorbcanbbebanbintegralbpartb
ofbthisbdecision.
3. Whatbarebthebfundamentalbvariablesbofbthebincomebtaxbsystembthatbdecision-
makersbshouldbbebfamiliarbwithbsobthatbtheybcanbapplybtaxbissuesbtobtheirbareasbofbresponsib
ility?
4. Whatbisbanb“after-tax”bapproachbtobdecisionbmaking?
. 1
InstructorbSolutionsbManualbChapterbOne
, Buckwold,bKitunen,bRomanbandbIqbal,bCanadianbIncomebTaxation,b2023-2024bEd.
SolutionsbtobReviewbQuestions
R1-
1bOncebprofitbisbdetermined,bthebIncomebTaxbActbdeterminesbthebamountbofbincomebtaxbthatb
results.bHowever,batballblevelsbofbmanagement,balternativebcoursesbofbactionbarebevaluated.bI
nbmanybcases,bthebchoicebofbonebalternativeboverbthebotherbmaybaffectbbothbthebamountbandbth
ebtimingbofbfuturebtaxesbonbincomebgeneratedbfrombthatbactivity.bTherefore,bthebpersonbmaki
ngbthosebdecisionsbhasbabdirectbinputbintobfuturebafter-
taxbcashbflow.bObviously,bdecisionsbthatbreduceborbpostponebthebpaymentbofbtaxbaffectbthebu
ltimatebreturnbonbinvestmentband,binbturn,bthebvaluebofbthebenterprise.bIncludingbthebtaxbvaria
blebasbabpartbofbthebformalbdecisionbprocessbwillbultimatelybleadbtobimprovedbafter-
taxbcashbflow.
R1-
2bExpansionbcanbbebachievedbinbnewbgeographicbareasbthroughbdirectbselling,borbbybestabli
shingbabformalbpresencebinbthebnewbterritorybwithbabbranchbofficeborbabseparatebcorporation.b
Thebnewbterritoriesbmaybalsobcrossbprovincialborbinternationalbboundaries.bProvincialbincom
ebtaxbratesbvarybamongstbthebprovinces.bThebamountbofbincomebthatbisbsubjectbtobtaxbinbtheb
newbprovincebwillbbebdifferentbforbeachbofbthebthreebalternativesbmentionedbabove.bForbexam
ple,bwithbdirectbselling,bnonebofbthebincomebisbtaxedbinbthebnewbprovince,bbutbwithbabseparateb
corporation,ballbofbthebincomebisbtaxedbinbthebnewbprovince.bBecausebthebtaxbcostbisbdifferentb
inbeachbcase,btaxationbisbabrelevantbpartbofbthebdecisionbandbmustbbebincludedbinbanybcost-
benefitbanalysisbthatbcomparesbthebthreebalternativesb[Reg.b400-402.1].
R1-
3bAbbasicbunderstandingbofbthebfollowingbvariablesbwillbsignificantlybstrengthenbabdecisionbm
aker'sbabilitybtobapplybtaxbissuesbtobtheirbareabofbresponsibility.
TypesbofbIncome -
Employment,bBusiness,bProperty,bCapitalbgainsbTax
ablebEntities - Individuals,bCorporations,bTrusts
AlternativebBusiness -
Corporation,bProprietorship,bPartnership,bLimitedbStr
uctures partnership,bJointbarrangement,bIncomebtrust
TaxbJurisdictions - Federal,bProvincial,bForeign
R1-
4bAllbcashbflowbdecisions,bwhetherbrelatedbtobrevenues,bexpenses,bassetbacquisitionsborbdiv
estitures,borbdebtbandbequitybrestructuring,bwillbimpactbthebamountbandbtimingbofbthebtaxbcost
.bTherefore,bcashbflowbexistsbonlybonbanbafterbtaxbbasis,band,bthebtaxbimpactsbwhetherborbnotbt
hebultimatebresultbofbthebdecisionbisbsuccessful.bAnbafter-taxbapproachbtobdecision-
makingbrequiresbeachbdecision-makerbtobthinkb"after-
tax"bforbeverybdecisionbatbthebtimebthebdecisionbisbbeingbmade,band,btobconsiderbalternativebc
oursesbofbactionbtobminimizebthebtaxbcost,binbthebsamebwaybthatbdecisionsbarebmadebregardin
gbotherbtypesbofbcosts.
Failureb tob applyb anb after-
taxb approachb atb theb timeb thatb decisionsb areb madeb mayb providebinaccuratebinformationbforb
evaluation,band,bresultbinbabpermanentlybinefficientbtaxbstructure.
, Buckwold,bKitunen,bRomanbandbIqbal,bCanadianbIncomebTaxation,b2023-2024bEd.
CHAPTER 1 b
. 2
InstructorbSolutionsbManualbChapterbOne
b b b
Planning and Decision Making26b b b b
th Edition b
By William Buckwold
b b
Complete Chapter Solutions Manualar
b b b b
e included (Ch 1 to 23)
b b b b b
** Immediate Download
b b
** Swift Response
b b
** All Chapters included
b b b
** Excel Solutions
b b
, Buckwold,bKitunen,bRomanbandbIqbal,bCanadianbIncomebTaxation,b2023-2024bEd.
CHAPTER 1 b
TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
b b b b b b
ReviewbQuestions
1. Ifbincomebtaxbisbimposedbafterbprofitsbhavebbeenbdetermined,bwhybisbtaxationbrelevantbtobb
usinessbdecisionbmaking?
2. Mostbbusinessbdecisionsbinvolvebthebevaluationbofbalternativebcoursesbofbaction.bForbexam
ple,babmarketingbmanagerbmaybbebresponsiblebforbchoosingbabstrategybforbestablishingbsal
esbinbnewbgeographicalbterritories.bBrieflybexplainbhowbthebtaxbfactorbcanbbebanbintegralbpartb
ofbthisbdecision.
3. Whatbarebthebfundamentalbvariablesbofbthebincomebtaxbsystembthatbdecision-
makersbshouldbbebfamiliarbwithbsobthatbtheybcanbapplybtaxbissuesbtobtheirbareasbofbresponsib
ility?
4. Whatbisbanb“after-tax”bapproachbtobdecisionbmaking?
. 1
InstructorbSolutionsbManualbChapterbOne
, Buckwold,bKitunen,bRomanbandbIqbal,bCanadianbIncomebTaxation,b2023-2024bEd.
SolutionsbtobReviewbQuestions
R1-
1bOncebprofitbisbdetermined,bthebIncomebTaxbActbdeterminesbthebamountbofbincomebtaxbthatb
results.bHowever,batballblevelsbofbmanagement,balternativebcoursesbofbactionbarebevaluated.bI
nbmanybcases,bthebchoicebofbonebalternativeboverbthebotherbmaybaffectbbothbthebamountbandbth
ebtimingbofbfuturebtaxesbonbincomebgeneratedbfrombthatbactivity.bTherefore,bthebpersonbmaki
ngbthosebdecisionsbhasbabdirectbinputbintobfuturebafter-
taxbcashbflow.bObviously,bdecisionsbthatbreduceborbpostponebthebpaymentbofbtaxbaffectbthebu
ltimatebreturnbonbinvestmentband,binbturn,bthebvaluebofbthebenterprise.bIncludingbthebtaxbvaria
blebasbabpartbofbthebformalbdecisionbprocessbwillbultimatelybleadbtobimprovedbafter-
taxbcashbflow.
R1-
2bExpansionbcanbbebachievedbinbnewbgeographicbareasbthroughbdirectbselling,borbbybestabli
shingbabformalbpresencebinbthebnewbterritorybwithbabbranchbofficeborbabseparatebcorporation.b
Thebnewbterritoriesbmaybalsobcrossbprovincialborbinternationalbboundaries.bProvincialbincom
ebtaxbratesbvarybamongstbthebprovinces.bThebamountbofbincomebthatbisbsubjectbtobtaxbinbtheb
newbprovincebwillbbebdifferentbforbeachbofbthebthreebalternativesbmentionedbabove.bForbexam
ple,bwithbdirectbselling,bnonebofbthebincomebisbtaxedbinbthebnewbprovince,bbutbwithbabseparateb
corporation,ballbofbthebincomebisbtaxedbinbthebnewbprovince.bBecausebthebtaxbcostbisbdifferentb
inbeachbcase,btaxationbisbabrelevantbpartbofbthebdecisionbandbmustbbebincludedbinbanybcost-
benefitbanalysisbthatbcomparesbthebthreebalternativesb[Reg.b400-402.1].
R1-
3bAbbasicbunderstandingbofbthebfollowingbvariablesbwillbsignificantlybstrengthenbabdecisionbm
aker'sbabilitybtobapplybtaxbissuesbtobtheirbareabofbresponsibility.
TypesbofbIncome -
Employment,bBusiness,bProperty,bCapitalbgainsbTax
ablebEntities - Individuals,bCorporations,bTrusts
AlternativebBusiness -
Corporation,bProprietorship,bPartnership,bLimitedbStr
uctures partnership,bJointbarrangement,bIncomebtrust
TaxbJurisdictions - Federal,bProvincial,bForeign
R1-
4bAllbcashbflowbdecisions,bwhetherbrelatedbtobrevenues,bexpenses,bassetbacquisitionsborbdiv
estitures,borbdebtbandbequitybrestructuring,bwillbimpactbthebamountbandbtimingbofbthebtaxbcost
.bTherefore,bcashbflowbexistsbonlybonbanbafterbtaxbbasis,band,bthebtaxbimpactsbwhetherborbnotbt
hebultimatebresultbofbthebdecisionbisbsuccessful.bAnbafter-taxbapproachbtobdecision-
makingbrequiresbeachbdecision-makerbtobthinkb"after-
tax"bforbeverybdecisionbatbthebtimebthebdecisionbisbbeingbmade,band,btobconsiderbalternativebc
oursesbofbactionbtobminimizebthebtaxbcost,binbthebsamebwaybthatbdecisionsbarebmadebregardin
gbotherbtypesbofbcosts.
Failureb tob applyb anb after-
taxb approachb atb theb timeb thatb decisionsb areb madeb mayb providebinaccuratebinformationbforb
evaluation,band,bresultbinbabpermanentlybinefficientbtaxbstructure.
, Buckwold,bKitunen,bRomanbandbIqbal,bCanadianbIncomebTaxation,b2023-2024bEd.
CHAPTER 1 b
. 2
InstructorbSolutionsbManualbChapterbOne
