AFM462 Chapter Notes - Chapter 12,13: Tax Deferral, Legal Personality, Deferral
6 Dec 2017
School
Department
Course
Professor
Document Summary
Remuneration: time value of money may make saving now greater than added cost in future (tax deferral in a corporation, tax deferral of personal tax on dividend of for lrip and for grip (,000 corporate income) Sbd: forced salary/bonuses to keep business income < 500k means higher tax for individual receiving it. Important for many tax deferrals and possible savings on business income: salary/bonuses paid must be reasonable to be deductible by corp. Interest/dividends favored to reduce cumulative net investment loss (cnil: preserves access to small business capital gains deduction; interest/div also reduces corp income. Interest income taxed the same as salary to individual (interest reduces cnil, salary does not) Sh: this is so the royalty will be taxed on deemed receipt under the agreement (so the corp does(cid:374)"t a(cid:272)tuall(cid:455) (cid:374)eed to pa(cid:455) the sh (cid:271)a(cid:272)k (cid:271)ut it (cid:449)ill still (cid:271)e ta(cid:454)ed)
