Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
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Chapter 2, Problem 29P
To determine
Write a letter suggesting an alternative plan that may lower the tax.
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Mr. Chuang set up a company called Good Home Limited. The company holds several properties in Hong Kong and lease out to earn rental income. Mr. Chuang wonders whether the company should pay property tax or profits tax. He also concerns if double taxation of the same income derived from a property under property tax and profits tax will charge to Good Home Limited and how it can avoid this if so.
Advise Mr. Chuang
Mr. Chan set up a company called Good Home Limited. The company holds several properties in Hong Kong and lease out to earn rental income. Mr. Chan wonders whether the company should pay property tax or profits tax. He also concerns if double taxation of the same income derived from a property under property tax and profits tax will charge to GoodHome Limited and how it can avoid this if so.
Question:
Advise Mr. Chan.
Your group has formed an Accounting Practice business partnership. Your area of expertise is in Income Tax matters in Australia.
Jonathan is one of your clients and he has come to see you seeking advice on how to minimize his tax.
You explain to Jonathan of the many ways in which to reduce his tax liability. Jonathan is most impressed by what you have told him and he pays a fee for your professional advice and then carries out your suggestions on tax minimisation.
Unfortunately, you have misread the tax legislation and as a result Jonathan is audited by the Australian Taxation Office who then issues him with a tax liability of $600,000.00 plus interest.
Discuss what the consequences are to your group for giving Jonathan bad advice.
Chapter 2 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - What is an arms-length transaction? What is its...Ch. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQ
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