Which of the following tax planning strategies is based on the present value of money?
A) timing.
B) tax avoidance.
C) income shifting.
D) conversion.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

Timing tax planning strategy is based on the present value of money, as it involves the decision of when to recognize income or expenses to maximize tax savings by considering the time value of money. The strategy involves deferring income or accelerating expenses to a future year or vice versa based on the expected inflation rate and interest rates, as the value of money changes over time. The other tax planning strategies such as tax avoidance, income shifting, and conversion are not necessarily based on the present value of money.

Which of the Following Tax Planning Strategies Is Based on the Present