Canadian Income Taxation, 2023/2024:
t t t
Planning and Decision Making 26t t t t
th Edition t
By William Buckwold t t
Complete Chapter Solutions Manual ar
t t t t
e included (Ch 1 to 23)
t t t t t
** Immediate Download
t t
** Swift Response
t t
** All Chapters included
t t t
** Excel Solutions
t t
, Buckwold,tKitunen,tRomantandtIqbal,tCanadiantIncometTaxation,t2023-2024tEd.
CHAPTERt1
TAXATION―tITStROLEtINtBUSINESStDECISIONtMAKING
ReviewtQuestions
1. Iftincomettaxtistimposedtaftertprofitsthavetbeentdetermined,twhytisttaxationtrelevantttotbusin
esstdecisiontmaking?
2. Mosttbusinesstdecisionstinvolvetthetevaluationtoftalternativetcoursestoftaction.tFortexample
,tatmarketingtmanagertmaytbetresponsibletfortchoosingtatstrategytfortestablishingtsalestintn
ewtgeographicaltterritories.tBrieflytexplainthowtthettaxtfactortcantbetantintegraltparttoftthistdec
ision.
3. Whattaretthetfundamentaltvariablestoftthetincomettaxtsystemtthattdecision-
makerstshouldtbetfamiliartwithtsotthatttheytcantapplyttaxtissuesttottheirtareastoftresponsibilit
y?
4. Whattistant“after-tax”tapproachttotdecisiontmaking?
. 1
InstructortSolutionstManualtChaptertOne
, Buckwold,tKitunen,tRomantandtIqbal,tCanadiantIncometTaxation,t2023-2024tEd.
SolutionsttotReviewtQuestions
R1-
1t Oncetprofittistdetermined,tthetIncometTaxtActtdeterminestthetamounttoftincomettaxtthattres
ults.tHowever,tattalltlevelstoftmanagement,talternativetcoursestoftactiontaretevaluated.tIntman
ytcases,tthetchoicetoftonetalternativetovertthetothertmaytaffecttbothtthetamounttandtthettimingto
ftfuturettaxestontincometgeneratedtfromtthattactivity.tTherefore,tthetpersontmakingtthosetdeci
sionsthastatdirecttinputtintotfuturetafter-
taxtcashtflow.tObviously,tdecisionstthattreducetortpostponetthetpaymenttofttaxtaffecttthetultim
atetreturntontinvestmenttand,tintturn,tthetvaluetoftthetenterprise.tIncludingtthettaxtvariabletasta
tparttoftthetformaltdecisiontprocesstwilltultimatelytleadttotimprovedtafter-taxtcashtflow.
R1-
2tExpansiontcantbetachievedtintnewtgeographictareastthroughtdirecttselling,tortbytestablishin
gtatformaltpresencetintthetnewtterritorytwithtatbranchtofficetortatseparatetcorporation.tThetne
wtterritoriestmaytalsotcrosstprovincialtortinternationaltboundaries.tProvincialtincomettaxtrates
tvarytamongsttthetprovinces.tThetamounttoftincometthattistsubjectttottaxtintthetnewtprovincetw
illtbetdifferenttforteachtoftthetthreetalternativestmentionedtabove.tFortexample,twithtdirecttselli
ng,tnonetoftthetincometisttaxedtintthetnewtprovince,tbuttwithtatseparatetcorporation,talltofttheti
ncometisttaxedtintthetnewtprovince.tBecausetthettaxtcosttistdifferenttinteachtcase,ttaxationtistatr
elevanttparttoftthetdecisiontandtmusttbetincludedtintanytcost-
benefittanalysistthattcomparestthetthreetalternativest[Reg.t400-402.1].
R1-
3tAtbasictunderstandingtoftthetfollowingtvariablestwilltsignificantlytstrengthentatdecisiontmak
er'stabilityttotapplyttaxtissuesttottheirtareatoftresponsibility.
TypestoftIncome -
Employment,tBusiness,tProperty,tCapitaltgainstTax
abletEntities - Individuals,tCorporations,tTrusts
AlternativetBusiness -
Corporation,tProprietorship,tPartnership,tLimitedtStru
ctures partnership,tJointtarrangement,tIncomettrust
TaxtJurisdictions - Federal,tProvincial,tForeign
R1-
4tAlltcashtflowtdecisions,twhethertrelatedttotrevenues,texpenses,tassettacquisitionstortdivesti
tures,tortdebttandtequitytrestructuring,twilltimpacttthetamounttandttimingtoftthettaxtcost.tThere
fore,tcashtflowtexiststonlytontantafterttaxtbasis,tand,tthettaxtimpactstwhethertortnott thet ultimate
t resultt oft thet decisiont ist successful.t Ant after-taxt approacht tot decision-
makingtrequiresteachtdecision-makerttotthinkt"after-
tax"tforteverytdecisiontattthettimetthetdecisiontistbeingtmade,tand,ttotconsidertalternativetcour
sestoftactionttotminimizetthettaxtcost,tintthetsametwaytthattdecisionstaretmadetregardingtothe
rttypestoftcosts.
Failuret tot applyt ant after-
taxt approacht att thet timet thatt decisionst aret madet mayt providetinaccuratetinformationtforteva
. 2
InstructortSolutionstManualtChaptertOne
, Buckwold,tKitunen,tRomantandtIqbal,tCanadiantIncometTaxation,t2023-2024tEd.
luation,tand,tresulttintatpermanentlytinefficientttaxtstructure.
CHAPTERt1
TAXATION―tITStROLEtINtBUSINESStDECISIONtMAKING
. 1
InstructortSolutionstManualtChaptertOne
