Acc 456 Short Answered Questions

The courts distinguish between an employee, defined in s.248(1) of the Income Tax Act, hereafter, ITA, as the “position of an individual in the service of some other person”. An independent contractor, is someone with a “contract for service.” The case that considered an employee versus and independent contractor was Wiebe Door Service Ltd. v M.N.R. In this case, the applicant owned a door instalment business and had a number of contractors that worked for them. The contractors were responsible for their own taxes, workers compensation and unemployment insurance. However

An estate freeze with respect to Phyllis and Freddie’s family business corporation allows them to fix the value of their shares in the business at a particular date and create an opportunity for Phyllis and Freddie to transfer the future growth of a business, investments, or other assets to other taxpayers, children or other designated beneficiaries. By freezing a beneficiary’s estate, they will have to pay tax on the growth which results in a tax deferral until the beneficiary passes away or they will have to dispose of his/her shares.

John will have to pay self-employment tax, which is the gross income that obtained in business in the amount of $300,000. He will actually have to pay "income" and "self-employment" tax on the "net" earnings from his business... not the entire $300K because presumably he has

1. (TCOs 2, 3, and 5) As we know, Congress devised a very broad definition of income and codified this definition in Section 61 of the Internal Revenue Code. Explain the Code’s definition of income and how it

What potential tax problems might result if an individual pursues his plan to transfer 40% of the corporate stock to his two children as gifts? Would it make any difference if an individual received all voting stock and had the new corporation transfer nonvoting stock to his children?

While grantor trusts are commonly created as part of an estate plan, estate planners may inadvertently be creating income tax issues that trustees and tax preparers must deal with during the administration. When the grantor of a grantor trust dies, or the grantor trust status terminates during the life of the grantor, for the most part the tax consequences are well established. What is unclear is what happens if the grantor trust had an outstanding liability to the grantor at the death of the grantor. This paper addresses the issue and how it may be treated. Part I of this paper will briefly address the history of

1) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.

Self-employed people will run their own business, they will be contracted to provide a service their clients. They will not be paid through PAYE and they do not have the same employment rights as employees or workers, Self-employed people will however still have protection for their health and safety on a client’s premises, they will have their rights and responsibilities set out in the terms of the contract with the client. They will not be entitled to holiday pay. They may however in some cases be classed as self-employed for tax purposes but classed as an employee or worker for employment rights. See point 2 Appendix

As a guide, someone who doesn’t know your work should be able to read your answer and fully understand and appreciate what work you have completed. Use these sample answers as a guide, and remember that you will also need to talk through your answers with your workplace mentor – which gives you another opportunity to demonstrate your achievement and gain sign off.

Self employed - if you are not employed in a contract of employment with an employer but contracted to provide services other a period of time for a fee or be a business in your own right. Therefore a person will work for themselves rather than a employer. You do not have employment rights but have to pay your own income tax and national insurance contributions.

For example, take a married couple, both age 55, with a $20 million estate. Assume that there is neither growth nor depletion of the assets and that both spouses die in a year when the estate-tax exemption is $3.5 million, and the top estate-tax rate is 45%. With the typical marital credit shelter trust, when the first spouse dies, $3.5 million is allocated to the credit shelter trust and $16.5 million to the marital trust. No federal estate tax is due. However, at the surviving spouse's death, the estate tax due is $5.85 million.

The estate tax is a tax upon your right to transfer property at the time of your death. It is often called the death tax and it has been a partisan point of disagreement for quite some time. As the tax only applies to estates of $5.45 million and over, this tax only applies to the wealthy. Enacted in 1916 to help finance World War I, the estate tax has come under more scrutiny lately because of our government’s financial situation and the one-hundredth anniversary (Caron 825). The intellectual world is divided on whether to repeal, reform, or keep unchanged the estate tax. Some even argue that transfers of wealth should not be taxed at all. This essay will contend that the current estate tax should be replaced with a lifetime accessions tax to encourage donors, reduce concentrations of wealth, and safeguard equality of opportunity. Before arguing for the lifetime accessions tax, this paper will outline the history of the estate tax, the purposes of taxing wealth transfers, and compare the lifetime accessions tax to other proposed alternatives.

Hi Jieyi! Great research in regards to the step-up basis, IRC Section 1014, and Section 6035! There are a plethora of sections that may relate to the topics, and it is critical in reviewing and understanding the applicable sections that may apply to the step-up basis. I agree with you that many taxpayers may be taking advantage of this law as this law would not only apply for wealthy families. However, if it does not conflict with any federal or state laws, then the taxpayers are not performing anything illegal per the federal and state laws. In regards to the step-up basis and my family, inheriting property is better than gifting if the heir decides to sell the property to avoid the gain tax. It is inevitable that some people will attempt

2010 Corporate Partnership Estate and Gift Tax with H&R Block TaxCut 4e Pratt Kulsrud Solution Manual

Breaking down self-employment tax can be classified into two realms. First being in the form of an individual’s income derived by their trade or business and the second being the income or loss by the individual’s partnership of said trade or business. This self employment tax is levied on income in excess of $400 and is in exclusion of real estate rentals, dividends, interest, capital gains tax,