page 22 kc question #1

this is transfering income to another entity. There is nothing in the spirit of the act which prohibitd a propiretor inco

2. this is also tax planning- shifting income to another entity. There is a business reason(keeping cash in the compan

3- this si an example of tax planining- we are shifting income to another entity by declaring the bonud ( expense) to

4- this is agin tax planing , shifting income to another entity. There ia a business reason for the parent company to b

Question 2:

this is another example of tax planning by shifting income to company B. The losses get used and the overall cashflo

chapter 3:
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Page 55
Question 1:
A) part year resident until November1. When she leave s the countey permenntly, she is no longer taxed by canada
B) Al is deemed a resident of canada becouse he appears to have social and economic ties to canda . He will be taxe
C) Kimberly is in camnada on a temporary , rule sqys that she is deeed a resident a resident for the entire year and m
D) the company was incorpoated in canda so it is deemed a resident no matter where it operates. It must pay taxes
E) Navy is a non- resident . Canada cannot tax its worlsd inco me but it can tax any branch that earns profits in caan

Question 2:
only the employment income of a non resident is reported on canadian return. The interest is part of property inco

Question 3
as a canadian resident, A would have to claim all income on oits canadian return. All ineterst income would bepart o
 which prohibitd a propiretor incorpoating and there are many other reseins for incorporating besides saving tax.

ason(keeping cash in the company)for Paul not taking salary.

declaring the bonud ( expense) to the company and income to the shareholder. The bonus is reasonable, and will be taxed in th

ason for the parent company to borrow funds and lend them tax free to subsidiary . The long term survival of the sub is at stake

s get used and the overall cashflow of company B is improved. This assures its longer term survival. In the end the same shareh

she is no longer taxed by canada on her world income. The sojourner rule does not apply becouse move is permanent.
mic ties to canda . He will be taxed by Canda on his worlsd income.
resident for the entire year and must pay taxes to canada.
ere it operates. It must pay taxes to canada on its world income.
y branch that earns profits in caanada.

e interest is part of property income and other incoem is subject to withholding taxes not part of the rerurn. Therefore mateo

All ineterst income would bepart of its canadain income taxations.

g besides saving tax.

easonable, and will be taxed in the hands of the shareholder anyway.

term survival of the sub is at stake and can be better

rvival. In the end the same shareholder will be taxed on amounts earned by him regardless of whether it is from company Aor

ouse move is permanent.

rt of the rerurn. Therefore mateo would only report 15000.

whether it is from company Aor company B.