1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

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Answer 1

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

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Answer 2

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

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Answer 3

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

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Answer 4

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Answer 8

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Explain the reason for the given statement is not true.

Answer 12

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Answer 13

Ch. 3 - 1. The goal of tax planning is to minimize taxes....Ch. 3 - Prob. 2DQ Ch. 3 - In this chapter we discussed three basic tax...Ch. 3 - What are the two basic timing strategies? What is...Ch. 3 - Prob. 5DQ Ch. 3 - What are some common examples of the timing...Ch. 3 - What factors increase the benefits of accelerating...Ch. 3 - How do changing tax rates affect the timing...Ch. 3 - Prob. 9DQ Ch. 3 - Prob. 10DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

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