CHAPTER 20 INCOME TAXATION OF TRUSTS AND ESTATES SOLUTIONS TO PROBLEM MATERIALS Question/ Problem 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 *21 22 *23 24 *25 *26 27 28 29 *30 31 32 Learning Objective LO 1 LO 1 LO 1 LO 1 LO 1 LO 1 LO 1 LO 2 LO 2 LO 2 LO 2 LO 2 LO 3 LO 3 LO 2, 3, 5 LO 4 LO 4 LO 1, 4 LO 5 LO 5 LO 1 LO 1 LO 1 LO 2 LO 2 LO 1, 2, 3 LO 2 LO 2 LO 2 LO 2, 3 LO 2, 3 LO 3 Topic Creating a trust Parties to a fiduciary entity Fiduciary tax terminology Fiduciary tax terminology
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CHAPTER 6 – RRSP & OTHER SAVINGS PLANS Why a limit? * Each individual is only entitled to save a specified amount in a registered retirement savings plan * Through pension adjustment (PA), those who participate in employer sponsored plan are limited in how much they can give to RRSP * Limit is based upon earned income in prior year * RRSP contribution limit is cumulative....any amounts not used can be carried forward; therefore, all Canadian taxpayers should try to accumulate
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The Investment Value of Home Ownership by Clarence C. Rose, PhD Abstract: Under tbe currentfitiance and economic environment, even with fears of a potential real estate bubble, home ownership may be one of the best long-term investment opportunities available today. For most Americans, their homes are their greatest source of net worth and a substantial source of tax savings. This article presents an overview of the tax savings opportunities available to homeowners and analyzes the investment
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Corporation versus Partnership Strayer University ACC317 Advanced Federal Taxation December 7, 2013 Starting a business is not an easy task. First, one must decide what type of entity the business will be in an effort to maximize profits and reduce tax obligations as much as possible. The two entities I will discuss are corporations and partnerships. A corporation is defined as a legal entity that is separate and distinct from its owners. Corporations have most of the responsibilities
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1-36 a. The objectives of an independent audit. Because audits involve examinations of financial information by independent experts, they increase the credibility of the information contained in the statement. Decision makers both within and outside the organization can use audited financial information with confidence that it is not likely to be materially misstated. And also they reduce the overall risk of making various types of economic decisions. The nature and emphasis of auditing has
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CHAPTER 1 – TAXES AND TAXING JURISDICTION Taxes are pervasive because they: o Are so widespread. o Come in so many varieties, and o Affect virtually every area of modern life. Taxes are dynamic because tax law changes so freque ntly. o Rate of change reflects fact that economic and poli tical assumptions on which tax structures are based are constantly ev olving. Tax – Payment to support the cost of government. o Differs from fine or penalty because tax is
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CHAPTER 3 BA II Plus 2nd . 9 Enter Financial Statements, Cash Flow, and Taxes Balance sheet Income statement Accounting income vs. cash flow MVA and EVA Federal tax system The Annual Report Balance sheet – provides a snapshot of a firm’s financial position at one point in time. Income statement – summarizes a firm’s revenues and expenses over a given period of time. Statement of retained earnings – shows how
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rates The tables below set out tax rates applicable to individuals for the 2012 and 2013 taxation years, together with major personal tax credits for both years. Federal income tax rates — 2013 and 2012 2013 taxable income | Federal marginal tax rate | Up to $43,561 | 15% | $43,562 – up to $87,123 | 22% | $87,124 – up to $135,054 | 26% | $135,055 and over | 29% | | | 2012 taxable income | Federal marginal tax rate | Up to $42,707 | 15% | $42,708 – up to $85,414 | 22% | $85,415 – up
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The budget is split between mandated government programs and discretionary spending. The mandated government programs consist of two thirds of the budget which include Medicare, Social Security, and interest on past government debt. According to Federal Spending: Where Does The Money Go (n.d.), Social Security compromises a third of mandatory spending. Medicare is 23% of mandatory spending. Discretionary spending is defense programs and government agencies. According to Government Spending (n.d.)
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CHAPTER ONE INTRODUCTION Background to the Study The subject of taxation has received considerable intellectual and theoretical attention in the literature. Taxation is one of the most volatile subjects in governance both in the developing and developed nations. Tax refers to a “compulsory levy by a public authority for which nothing is received directly in return” (James and Nobes, 1992). According to Nightingale (2001)
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