稅收籌劃原理課件：Maxims of Income Tax Planning

MaximsofIncomeTaxPlanning

MaximsofIncomeTaxPlanningLearningObjectivesDifferentiatebetweentaxavoidanceandtaxevasion.Listthefourvariablethatdeterminethetaxconsequencesofatransaction.ExplainwhyanincomeshiftoradeductionshiftcanimproveNPV.IdentifythecircumstancesinwhichataxdeferralstrategymaynotimproveNPV.Contrastthetaxcharacterofordinaryincomeandcapitalgain.Distinguishbetweenanexplicittaxandanimplicittax.Summarizethefourtaxplanningmaxims.DescribethethreelegaldoctrinesthattheIRSusestochallengetaxplanningstrategies.MaximsofIncomeTaxPlanningTaxAvoidance—NotEvasionLegitimatemeansreducingtaxesaredescribedastaxavoidance;Illegalmeansthesameendconstitutetaxevasion.MaximsofIncomeTaxPlanningWhatMakesIncomeTaxPlanningPossible?1.Theentityvariable:Whichentityundertakesthetransaction?2.Thetimeperiodvariable:Duringwhichtaxyearoryearsdoesthetransactionoccur?3.Thejurisdictionvariable:Inwhichtaxingjurisdictiondoesthetransactionoccur?4.Thecharactervariable:Whatisthetaxcharacteroftheincomefromthetransaction?MaximsofIncomeTaxPlanningTheEntityVariableIncomeShiftingDeductionShiftingConstraintsonIncomeShiftingAssignmentofIncomeDoctrineIncomemustbetaxedtotheentitythatrenderstheserviceorownsthecapitalwithrespecttowhichtheincomeispaid.MaximsofIncomeTaxPlanningTheTimePeriodVariableMaximsofIncomeTaxPlanning Year0 Year1Revenues $120$180Expenses (40)(80)Incometaxcost:Taxableincome $80$100

.35

.35Taxcost (28)

(35)After-taxnetcashflow $52$65Presentvalueofyear0cashflow $52Presentvalueofyear1cashflow（$65×.893discountfactor） 58NPV $110MaximsofIncomeTaxPlanning Year0 Year1Revenues $120$180Expenses (40)(80)Incometaxcost:Taxableincome 0$180

.35

.35Taxcost -0-

(63)After-taxnetcashflow $80$37Presentvalueofyear0cashflow $80Presentvalueofyear1cashflow（$65×.893discountfactor） 33NPV $113MaximsofIncomeTaxPlanningTheTimePeriodVariableIncomeDeferralandOpportunityCostsMaximsofIncomeTaxPlanning Year0 Year1Revenues $40$260Expenses (40)(80)Incometaxcost:Taxableincome -0-

$180

.35Taxcost -0-

(63)After-taxnetcashflow -0- $37Presentvalueofyear0cashflow -0-Presentvalueofyear1cashflow（$65×.893discountfactor） 104NPV $104MaximsofIncomeTaxPlanning Year0 Year1Revenues $120$180Expenses (120) -0-

Incometaxcost:Taxableincome -0-

$180

.35Taxcost -0-

(63)After-taxnetcashflow -0- $117Presentvalueofyear0cashflow -0-Presentvalueofyear1cashflow（$65×.893discountfactor） 104NPV $104MaximsofIncomeTaxPlanningTheTimePeriodVariableIncomeDeferralandRateChangesMaximsofIncomeTaxPlanning Year0Year1Year2Year3WithoutincomeTaxableincome $30,000-0--0--0-Taxcostat35% $10,500-0--0--0-NPVoftaxcosts $10,500Withdeferral:Taxableincome -0-$10,000$10,000$10,000Taxcostat35% -0-$3,500$3,500$3,500Discountfactors.917

.842

.772 $3,210$2,947$2,702NPVoftaxcosts $8,859MaximsofIncomeTaxPlanning

Year0Year1Year2Year3Taxableincome -0-$10,000$10,000$10,000Taxcostat45% -0-$4,500$4,500$4,500Discountfactors .917

.842

.772 $4,127$3,789$3,474ActualNPVoftaxcosts $11,390MaximsofIncomeTaxPlanningActualNPVoftaxcosts $11,390NPVoftaxcostwithoutdeferral（10，500）

$890MaximsofIncomeTaxPlanningTheJurisdictionVariableMaximsofIncomeTaxPlanning FirmYFirmZBefore-taxcash/income$5,000$5,000Stateincometaxcost (200)

(500)Federaltaxableincome$4,800$4,500Federaltaxcost(Taxableincome×39%) (1,872)

(1,755)After-taxcashflow$2,928

$2,745MaximsofIncomeTaxPlanningTheCharacterVariableMaximsofIncomeTaxPlanning

Ordinary Capital Tax-Exempt Income Gain Income

Before-taxcash/income$1,000 $1,000 $1,000Taxcost (350)

(150)

-0-After-taxcashflow $650

$850

$1,000MaximsofIncomeTaxPlanningTheCharacterVariableDeterminingtheValueofPreferentialRatesMaximsofIncomeTaxPlanning OrdinaryIncomeCapitalGainBefore-taxcash/income$1,000 $1,000Taxcost(28%regularrate) (280)

(150)After-taxcashflow $720

$850MaximsofIncomeTaxPlanningTheCharacterVariableConstraintsonConversionImplicitTaxesMaximsofIncomeTaxPlanning Corporate Municipal BondInterest BondInterestBefore-taxcash/income$2,000 $2,000Taxcost(28%regularrate) (660)

-0-After-taxcashflow