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 considers the time value of money and aims to arrange transactions in a way that the tax liability is minimized or deferred to a later period when the tax rate may be lower. This strategy is based on the present value of money which considers that a dollar received in the future is worth less than a dollar received today due to inflation and the opportunity cost of money.

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