CanadiannIncomenTaxation,n2023/2024:
PlanningnandnDecisionnMakin
gn26thnEdition
BynWilliamnBuckwold
CompletenChapternSolutionsnManua
lnarenincludedn(Chn1nton23)
**nImmediatenDownload
**nSwiftnResponse
**nAllnChaptersnincluded
**nExcelnSolutions
, Buckwold,nKitunen,nRomannandnIqbal,nCanadiannIncomenTaxation,n2023-
2024nEd.
CHAPTERn
1
TAXATION―nITSnROLEnINnBUSINESSnDECISIONnMAKING
ReviewnQuestions
1. Ifnincomentaxnisnimposednafternprofitsnhavenbeenndetermined,nwhynisntaxationnrele
vantntonbusinessndecisionnmaking?
2. Mostnbusinessndecisionsninvolventhenevaluationnofnalternativencoursesnofnaction.nF
ornexample,nanmarketingnmanagernmaynbenresponsiblenfornchoosingnanstrategynfor
nestablishingnsalesninnnewngeographicalnterritories.nBrieflynexplainnhownthentaxnfacto
rncannbenannintegralnpartnofnthisndecision.
3. Whatnarenthenfundamentalnvariablesnofnthenincomentaxnsystemnthatndecision-
makersnshouldnbenfamiliarnwithnsonthatntheyncannapplyntaxnissuesntontheirnareasnof
nresponsibility?
4. Whatnisnann“after-tax”napproachntondecisionnmaking?
. 1
InstructornSolutionsnManualnChapternOne
, Buckwold,nKitunen,nRomannandnIqbal,nCanadiannIncomenTaxation,n2023-
2024nEd.
SolutionsntonReviewnQuestions
R1-
1nOncenprofitnisndetermined,nthenIncomenTaxnActndeterminesnthenamountnofnincom
entaxnthatnresults.nHowever,natnallnlevelsnofnmanagement,nalternativencoursesnofnac
tionnarenevaluated.nInnmanyncases,nthenchoicenofnonenalternativenovernthenothernmay
naffectnbothnthenamountnandnthentimingnofnfuturentaxesnonnincomengeneratednfromnt
hatnactivity.nTherefore,nthenpersonnmakingnthosendecisionsnhasnandirectninputnintonf
uturenafter-
taxncashnflow.nObviously,ndecisionsnthatnreducenornpostponenthenpaymentnofntaxnaf
fectnthenultimatenreturnnonninvestmentnand,ninnturn,nthenvaluenofnthenenterprise.nIncl
udingnthentaxnvariablenasnanpartnofnthenformalndecisionnprocessnwillnultimatelynlead
ntonimprovednafter-taxncashnflow.
R1-
2nExpansionncannbenachievedninnnewngeographicnareasnthroughndirectnselling,nornb
ynestablishingnanformalnpresenceninnthennewnterritorynwithnanbranchnofficenornansep
aratencorporation.nThennewnterritoriesnmaynalsoncrossnprovincialnorninternationalnbou
ndaries.nProvincialnincomentaxnratesnvarynamongstnthenprovinces.nThenamountnofnin
comenthatnisnsubjectntontaxninnthennewnprovincenwillnbendifferentnforneachnofnthent
hreenalternativesnmentionednabove.nFornexample,nwithndirectnselling,nnonenofnthenin
comenisntaxedninnthennewnprovince,nbutnwithnanseparatencorporation,nallnofntheninco
menisntaxedninnthennewnprovince.nBecausenthentaxncostnisndifferentninneachncase,nt
axationnisnanrelevantnpartnofnthendecisionnandnmustnbenincludedninnanyncost-
benefitnanalysisnthatncomparesnthenthreenalternativesn[Reg.n400-402.1].
R1-
3nAnbasicnunderstandingnofnthenfollowingnvariablesnwillnsignificantlynstrengthennande
cisionnmaker'snabilityntonapplyntaxnissuesntontheirnareanofnresponsibility.
TypesnofnIncome -
Employment,nBusiness,nProperty,nCapitalngainsn
TaxablenEntities - Individuals,nCorporations,nTrusts
AlternativenBusiness -
Corporation,nProprietorship,nPartnership,nLimitedn
Structures partnership,nJointnarrangement,nIncomentrust
TaxnJurisdictions - Federal,nProvincial,nForeign
R1-
4nAllncashnflowndecisions,nwhethernrelatedntonrevenues,nexpenses,nassetnacquisition
snorndivestitures,norndebtnandnequitynrestructuring,nwillnimpactnthenamountnandntimin
gnofnthentaxncost.nTherefore,ncashnflownexistsnonlynonnannafterntaxnbasis,nand,nthen
taxnimpactsnwhethernornnotnthenultimatenresultnofnthendecisionnisnsuccessful.nAnnaft
er-taxnapproachntondecision-makingnrequiresneachndecision-makerntonthinkn"after-
tax"nforneveryndecisionnatnthentimenthendecisionnisnbeingnmade,nand,ntonconsidernalt
ernativencoursesnofnactionntonminimizenthentaxncost,ninnthensamenwaynthatndecision
snarenmadenregardingnotherntypesnofncosts.
Failurenton applyn ann after-
taxn approachn atnthentimenthatndecisionsn aren maden mayn provideninaccurateninforma
tionnfornevaluation,nand,nresultninnanpermanentlyninefficientntaxnstructure.
, Buckwold,nKitunen,nRomannandnIqbal,nCanadiannIncomenTaxation,n2023-
2024nEd.
CHAPTERn
1
. 2
InstructornSolutionsnManualnChapternOne
PlanningnandnDecisionnMakin
gn26thnEdition
BynWilliamnBuckwold
CompletenChapternSolutionsnManua
lnarenincludedn(Chn1nton23)
**nImmediatenDownload
**nSwiftnResponse
**nAllnChaptersnincluded
**nExcelnSolutions
, Buckwold,nKitunen,nRomannandnIqbal,nCanadiannIncomenTaxation,n2023-
2024nEd.
CHAPTERn
1
TAXATION―nITSnROLEnINnBUSINESSnDECISIONnMAKING
ReviewnQuestions
1. Ifnincomentaxnisnimposednafternprofitsnhavenbeenndetermined,nwhynisntaxationnrele
vantntonbusinessndecisionnmaking?
2. Mostnbusinessndecisionsninvolventhenevaluationnofnalternativencoursesnofnaction.nF
ornexample,nanmarketingnmanagernmaynbenresponsiblenfornchoosingnanstrategynfor
nestablishingnsalesninnnewngeographicalnterritories.nBrieflynexplainnhownthentaxnfacto
rncannbenannintegralnpartnofnthisndecision.
3. Whatnarenthenfundamentalnvariablesnofnthenincomentaxnsystemnthatndecision-
makersnshouldnbenfamiliarnwithnsonthatntheyncannapplyntaxnissuesntontheirnareasnof
nresponsibility?
4. Whatnisnann“after-tax”napproachntondecisionnmaking?
. 1
InstructornSolutionsnManualnChapternOne
, Buckwold,nKitunen,nRomannandnIqbal,nCanadiannIncomenTaxation,n2023-
2024nEd.
SolutionsntonReviewnQuestions
R1-
1nOncenprofitnisndetermined,nthenIncomenTaxnActndeterminesnthenamountnofnincom
entaxnthatnresults.nHowever,natnallnlevelsnofnmanagement,nalternativencoursesnofnac
tionnarenevaluated.nInnmanyncases,nthenchoicenofnonenalternativenovernthenothernmay
naffectnbothnthenamountnandnthentimingnofnfuturentaxesnonnincomengeneratednfromnt
hatnactivity.nTherefore,nthenpersonnmakingnthosendecisionsnhasnandirectninputnintonf
uturenafter-
taxncashnflow.nObviously,ndecisionsnthatnreducenornpostponenthenpaymentnofntaxnaf
fectnthenultimatenreturnnonninvestmentnand,ninnturn,nthenvaluenofnthenenterprise.nIncl
udingnthentaxnvariablenasnanpartnofnthenformalndecisionnprocessnwillnultimatelynlead
ntonimprovednafter-taxncashnflow.
R1-
2nExpansionncannbenachievedninnnewngeographicnareasnthroughndirectnselling,nornb
ynestablishingnanformalnpresenceninnthennewnterritorynwithnanbranchnofficenornansep
aratencorporation.nThennewnterritoriesnmaynalsoncrossnprovincialnorninternationalnbou
ndaries.nProvincialnincomentaxnratesnvarynamongstnthenprovinces.nThenamountnofnin
comenthatnisnsubjectntontaxninnthennewnprovincenwillnbendifferentnforneachnofnthent
hreenalternativesnmentionednabove.nFornexample,nwithndirectnselling,nnonenofnthenin
comenisntaxedninnthennewnprovince,nbutnwithnanseparatencorporation,nallnofntheninco
menisntaxedninnthennewnprovince.nBecausenthentaxncostnisndifferentninneachncase,nt
axationnisnanrelevantnpartnofnthendecisionnandnmustnbenincludedninnanyncost-
benefitnanalysisnthatncomparesnthenthreenalternativesn[Reg.n400-402.1].
R1-
3nAnbasicnunderstandingnofnthenfollowingnvariablesnwillnsignificantlynstrengthennande
cisionnmaker'snabilityntonapplyntaxnissuesntontheirnareanofnresponsibility.
TypesnofnIncome -
Employment,nBusiness,nProperty,nCapitalngainsn
TaxablenEntities - Individuals,nCorporations,nTrusts
AlternativenBusiness -
Corporation,nProprietorship,nPartnership,nLimitedn
Structures partnership,nJointnarrangement,nIncomentrust
TaxnJurisdictions - Federal,nProvincial,nForeign
R1-
4nAllncashnflowndecisions,nwhethernrelatedntonrevenues,nexpenses,nassetnacquisition
snorndivestitures,norndebtnandnequitynrestructuring,nwillnimpactnthenamountnandntimin
gnofnthentaxncost.nTherefore,ncashnflownexistsnonlynonnannafterntaxnbasis,nand,nthen
taxnimpactsnwhethernornnotnthenultimatenresultnofnthendecisionnisnsuccessful.nAnnaft
er-taxnapproachntondecision-makingnrequiresneachndecision-makerntonthinkn"after-
tax"nforneveryndecisionnatnthentimenthendecisionnisnbeingnmade,nand,ntonconsidernalt
ernativencoursesnofnactionntonminimizenthentaxncost,ninnthensamenwaynthatndecision
snarenmadenregardingnotherntypesnofncosts.
Failurenton applyn ann after-
taxn approachn atnthentimenthatndecisionsn aren maden mayn provideninaccurateninforma
tionnfornevaluation,nand,nresultninnanpermanentlyninefficientntaxnstructure.
, Buckwold,nKitunen,nRomannandnIqbal,nCanadiannIncomenTaxation,n2023-
2024nEd.
CHAPTERn
1
. 2
InstructornSolutionsnManualnChapternOne
