Solution Manual for Canadian Income Taxation Planning and Decision Making, 26th Edition by Buckwold (All Chapters included.pdf

Canadian Income Taxation, 2023/2024:
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Planning and Decision Making 2
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6th Edition m




By William Buckwold
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Complete Chapter Solutions Manual ar
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e included (Ch 1 to 23)
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** Immediate Download
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** Swift Response
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** All Chapters included
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** Excel Solutions
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, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
CHAPTER 1 m




TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
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ReviewmQuestions

1. If mincomemtax mismimposedmaftermprofitsmhavembeenmdetermined,mwhy mismtaxationmrelevantmt
ombusinessmdecisionmmaking?

2. Mostmbusinessmdecisionsminvolvemthemevaluationmof malternativemcoursesmof maction.mFormex
ample,mammarketingmmanagermmay mbemresponsiblemformchoosingmamstrategy mformestablishi
ngmsalesminmnewmgeographicalmterritories.mBriefly mexplainmhowmthemtax mfactormcanmbemanmint
egralmpartmof mthismdecision.

3. Whatmaremthemfundamentalmvariablesmof mthemincomemtaxmsystemmthatmdecision-
makersmshouldmbemfamiliarmwithmsomthatmtheymcanmapply mtaxmissuesmtomtheirmareasmof mresp
onsibility?

4. Whatmismanm“after-tax”mapproachmtomdecisionmmaking?




. 1
InstructormSolutionsmManualmChaptermOne

, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.

SolutionsmtomReviewmQuestions

R1-
1m Oncemprofitmismdetermined,mthemIncomemTax mActmdeterminesmthemamountmofmincomemtax
mthatmresults.mHowever,matmallmlevelsmof mmanagement,malternativemcoursesmofmactionmaremev

aluated.mInmmany mcases,mthemchoicemof monemalternativemovermthemothermmay maffectmbothmthem
amountmandmthemtimingmofmfuturemtaxesmonmincomemgeneratedmfrommthatmactivity.mTherefor
e,mthempersonmmakingmthosemdecisionsmhasmamdirectminputmintomfuturemafter-
tax mcashmflow.mObviously,mdecisionsmthatmreducemormpostponemthempaymentmof mtax maffectmt
hemultimatemreturnmonminvestmentmand,minmturn,mthemvaluemofmthementerprise.mIncludingmthem
tax mvariablemasmampartmofmthemformalmdecisionmprocessmwillmultimately mleadmtomimprovedmaft
er-tax mcashmflow.

R1-
2mExpansionmcanmbemachievedminmnewmgeographic mareasmthroughmdirectmselling,mormby mest
ablishingmamformalmpresenceminmthemnewmterritorymwithmambranchmofficemormamseparatemcorp
oration.mThemnewmterritoriesmmay malsomcrossmprovincialmorminternationalmboundaries.mProvi
ncialmincomemtax mratesmvarymamongstmthemprovinces.mThemamountmof mincomemthatmismsubje
ctmtomtax minmthemnewmprovincemwillmbemdifferentmformeachmof mthemthreemalternativesmmention
edmabove.mFormexample,mwithmdirectmselling,mnonemof mthemincomemismtaxedminmthemnewmpro
vince,mbutmwithmamseparatemcorporation,mallmof mthemincomemismtaxedminmthemnewmprovince.m
Becausemthemtax mcostmismdifferentminmeachmcase,mtaxationmismamrelevantmpartmof mthemdecisionm
andmmustmbemincludedminmany mcost-
benefitmanalysismthatmcomparesmthemthreemalternativesm[Reg.m400-402.1].

R1-
3mAmbasic munderstandingmof mthemfollowingmvariablesmwillmsignificantly mstrengthenmamdecisio
nmmaker'smability mtomapply mtax missuesmtomtheirmareamof mresponsibility.

Typesmof mIncome -

Employment,mBusiness,mProperty,mCapitalmgainsmT

axablemEntities - Individuals,mCorporations,mTrusts

AlternativemBusiness -
Corporation,mProprietorship,mPartnership,mLimitedmSt
ructures partnership,mJointmarrangement,mIncomemtrust

Tax mJurisdictions - Federal,mProvincial,mForeign

R1-
4mAllmcashmflowmdecisions,mwhethermrelatedmtomrevenues,mexpenses,massetmacquisitionsmorm
divestitures,mormdebtmandmequity mrestructuring,mwillmimpactmthemamountmandmtimingmofmthemt
ax mcost.mTherefore,mcashmflowmexistsmonly monmanmaftermtax mbasis,mand,mthemtax mimpactsmwhe
thermormnotm them ultimatem resultm ofm them decisionm ism successful.m Anm after-
tax m approachm tom decision-makingmrequiresmeachmdecision-makermtomthinkm"after-
tax"mformeverymdecisionmatmthemtimemthemdecisionmismbeingmmade,mand,mtomconsidermalternati
vemcoursesmofmactionmtomminimizemthemtaxmcost,minmthemsamemway mthatmdecisionsmaremmad
emregardingmothermtypesmof mcosts.

Failurem tom apply m anm after-
tax m approachm atm them timem thatm decisionsm arem madem may m provideminaccurateminformation
mformevaluation,mand,mresultminmampermanently minefficientmtax mstructure.

, Buckwold,mKitunen,mRoman mand mIqbal,mCanadian mIncomemTaxation,m2023-
2024 mEd.
CHAPTER 1 m




TAXATION― ITS ROLE IN BUSINESS DECISION MAKING
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InstructormSolutionsmManualmChaptermOne