The manager at Big Company Corporation has decided to sell a piece of capital equipment after the company's year-end,in order to avoid paying capital gains tax this year.Which tax planning method has the manager used?
A) Transferring income to another entity.
B) Converting the nature of income from one type to another.
C) Shifting income from one time period to another.
D) This is a form of tax evasion and is not allowed.

Question

Quizplus · Accepted Answer

The manager has used the tax planning method of shifting income from one time period to another by selling the capital equipment after the company's year-end to avoid paying capital gains tax in the current year. This is a legal and ethical tax planning method as long as it is within the boundaries of tax laws and regulations.

The Manager at Big Company Corporation Has Decided to Sell