Business Question
To complete the communication assignment, each student must read and consider the tax issues in the following Communication Assignment Case and then submit a written report that SUMMARIZES, EXPLAINS and ADVISES whether the expenditures made by Dr. Sweet during the current taxation year are deductible in calculating her Net Income for Tax Purposes.
Dr. Sweet is a dentist with a well-established practice in Smith Falls, Ontario. She has sought your advice regarding the deductibility of the following expenditures made during the current taxation year:
- Insurance payments included a $680 premium for coverage of her office and contents, $1,800 for malpractice coverage and $1,700 in life insurance premiums
- Payments were made to a collection agency in the amount of $1,250 for assistance in collecting past due amounts from patients
- Contributions of $600 were made to various registered charities
- Dr. Sweet paid a total of $18,000 to her husband for his services as a full-time bookkeeper and receptionist
- A total of $4,600 was spent to attend a dental convention in Phoenix, Arizona. Dr. Sweet was accompanied by her husband and $1,500 of the total cost of the trip relates directly to him
- An amount of $1,000 was paid for membership in a racquets club. In addition, $1,300 was spent for court time, approximately 40% of which was for time spent playing with patients
- Dr. Sweet paid $1,200 in legal and accounting fees. These fees related to fighting a personal income tax reassessment for a previous tax year. The fight was not successful and, as a consequence, Dr. Sweet was required to pay additional taxes of $13,000 plus $1,600 in interest on the late payments
- During the year, Dr. Sweet spent $3,200 purchasing provincial lottery tickets
Required:
Advise Dr. Sweet with respect to the deductibility of the preceding expenditures in the calculation of Net Income for Tax Purposes. Explain your position on each expenditure
Assignment Rubric
| Level 4 | Level 3 | Level 2 | Level 1 | Level 0 | |
|---|---|---|---|---|---|
| Issue 1: Insurance payments | Points:4 (10.00%)
Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 2: Collection agency |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 3: Charities |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 4: Spouse |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 5: Dental Convention |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 6: Club Membership |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 7: Costs re Tax Reassessment |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Issue 8: Lottery tickets |
Points:4 (10.00%) Provides a comprehensive overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility logically stems from the analysis presented |
Points:3 (7.50%) Provides a reasonable overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is supported by the analysis presented |
Points:2 (5.00%) Provides a superficial overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and somewhat supported by the analysis presented |
Points:1 (2.50%) Provides an incomplete overview of the tax issues involved in determining whether the expenditure is deductible. Conclusion regarding deductibility is weak and not consistent with the analysis presented |
Points:0 (0.00%) Analysis is wholly inconsistent with the facts of the case and rules and regulations in the Income Tax Act or no analysis provided |
| Business Writing |
Points:8 (20.00%) Ideas and analysis are clear, concise and coherent. Case is well organized and logically connected and supported by facts, data and information, which are properly cited. Proper grammar, spelling and punctuation. |
Points:6 (15.00%) Ideas and analysis are somewhat clear, concise and coherent. Case is somewhat organized and logically connected. Some but not all analysis is supported by facts, data and information. A few grammar, spelling and punctuation issues. |
Points:4 (10.00%) Ideas and analysis are unclear, redundant and repetitive. Case is not well organized nor logically connected. Analysis is not always supported by facts, data and information. Many grammar, spelling and punctuation issues. |
Points:2 (5.00%) Minimal analysis, which is unclear, redundant, repetitive, disorganized and not supported by facts, data or information. Many grammar, spelling and punctuation issues. |
Points:0 (0.00%) Work is wholly deficient, rife with grammatical errors and spelling mistakes. |
