Question

In: Accounting

Question 5 (theory questions) 1) Explain what it means when partnership is through entity 2) Why...

Question 5 (theory questions)

1) Explain what it means when partnership is through entity

2) Why it is important to know whether or not a Canadian company is associated?

3) What are the similarities and differences for the charitable donations credit and political donations credit?

4) A business is able to claim the legal benefit of its assets, does a partnership arrangement do the same?

Solutions

Expert Solution

1. A partnership through entity is a legal business entity that passes income on to the owners. These kind of entities are useful device to limit taxation by avoiding double taxation. In this only owners are taxed on revenues not the entity itself. This type of partnership is called flow-through entity.

2. it is important to know whether or not a Canadian company is associated because, being a associated company in Canada has numerous benefits . When a Canadian company is associated with another, these companies should be treated as a group when applying the small business deduction on active business income. When one sells shares in a company, if they are deemed to be qualified small business associate shares and they meet certain tests, they may be eligible for lifetime capital gain tax exemption of a certain amount.

3.

particulars Similarities Differences
Charitable donation credit ( CDC)
  • An individual get tax credits for donating the both
  • CDCs are issued partly by federal government and partly by provincial or territorial government.
  • PDCs are issued totally separately by federal government and provincial or territorial government.
  • PDCs are more limited than CDCs in types of claimable gifts
Political Donation Credit

4. As business is able to claim the legal benefits of its assets, forming a partnership is kind of a strategy for asset-protection planning. Partners of the partnership are personally liable for the business obligations of the partnership. It means if the partnership can't afford to pay creditors or the business fails, the partners are individually responsible to pay for the debts and creditors can go after personal assets such as bank accounts, cars etc


Related Solutions

Question 5 (theory questions) 1) Explain what it means when partnership is through entity 2) Why...
Question 5 (theory questions) 1) Explain what it means when partnership is through entity 2) Why it is important to know whether or not a Canadian company is associated? 3) What are the similarities and differences for the charitable donations credit and political donations credit? 4) A business is able to claim the legal benefit of its assets, does a partnership arrangement do the same?
Explain the following theories of Equity: 1. entity theory 2. fund theory 3. commander theory 4....
Explain the following theories of Equity: 1. entity theory 2. fund theory 3. commander theory 4. enterprise theory
Question 1 Accuracy means presenting data that is based on theory. True False Question 2 A...
Question 1 Accuracy means presenting data that is based on theory. True False Question 2 A celebrity spokesperson is never a good idea. True False Question 3 A creative brief should help identify what’s in it for me prior to message development. True False Question 4 A call to action is a necessary component of a health communication message. True False Question 5 Fidelity monitoring is a part of the design phase of evaluation. True False
What is the difference between the aggregate and entity theory of partnership taxation? Provide two examples...
What is the difference between the aggregate and entity theory of partnership taxation? Provide two examples of how partnership tax rules reflect the aggregate theory and two examples of how they reflect the entity theory.
Question No: 2 Short Theory Questions:                                    &
Question No: 2 Short Theory Questions:                                                                   Note: Answer the following questions:                                                                                                                                              What are revaluation model of the property, plant and equipment? What is current rate method?   What is horizontal analysis? Answer all (Write in box “True or False “ ) Transfer pricing is setting prices on goods and services exchanged between separate divisions within the same firm and these prices have a direct impact on the profits of the different division.                                                                                                                (           ) Harmonization is the process...
1. Explain a flow-through entity. How many times is flow-through entity income taxed, who pays the...
1. Explain a flow-through entity. How many times is flow-through entity income taxed, who pays the tax, and what is the tax rate. 2. Discuss corporate taxable income and the concept of double-taxation. Who pays the first level and at what tax rate? Who pays the second level of tax and at what tax rate?
Post Lab Questions: 1. Describe the underlying principle of VSEPR theory. 2. Explain why two compounds...
Post Lab Questions: 1. Describe the underlying principle of VSEPR theory. 2. Explain why two compounds with the same generic formula, NH3 and BH3, have different geometries and different shapes. 3. Why are the structures of H2S and H2O so similar? Why are the structures of O3and SO2 so different? 4. Although PH3 and BH3 both contain bonds with similar polarity, one molecule is polar while the other molecule is nonpolar. Explain. 5. Write a detailed procedure for converting a...
QUESTION 1 Stakeholder theory proposes: none of the options are correct the purpose of an entity...
QUESTION 1 Stakeholder theory proposes: none of the options are correct the purpose of an entity is to work for the good of all stakeholder groups the sole purpose of an entity is to earn the highest profits for its shareholders an entity's sole responsibility is to its shareholders and creditors 1 points    QUESTION 2 Owners of a business are part of a wider collective with an interest in the business known as: Stakeholders Shareholders Managers Suppliers 1 points...
For questions 1, 2, and 3, walk through each question by hand, then use the “disp”...
For questions 1, 2, and 3, walk through each question by hand, then use the “disp” command in your MATLAB script to display your answer to the screen. 1. What is the final value of x? x = 10; if round(x/5) == x/5 x = 2 * x + 4; elseif x == 10 x = 4 * x; else x = 0; end 2. What is the final value of x? x = 10; if round(x/3) == x/3 x...
Question 2 a) Questions 1 through 8 are typical internal control questionnaires used for purchases and...
Question 2 a) Questions 1 through 8 are typical internal control questionnaires used for purchases and payment cycle. 1. Do personnel who are independent of the receiving and shipping functions and the payables and disbursing functions perform the purchasing function? 2. Are all receiving reports pre-numbered and the numerical sequence checked by a person independent of cheque preparation? 3. Does the mailroom route all vendors' invoices directly to accounting department? 4. Does a responsible employee review and approve the invoice...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT