Question

the ceo 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 will the ceo be using? question 1select one: a. shifting income from one time period to another. b. converting the nature of income from one type to another. c. this is a form of tax evasion and is not allowed. d. transferring income to another entity

Answer 1

The CEO at Big Company Corporation is using the tax planning method of shifting income from one time period to another in order to avoid paying capital gains tax this year.

Step-by-step explanation:

The CEO at Big Company Corporation is using the tax planning method of shifting income from one time period to another in order to avoid paying capital gains tax this year. By selling the piece of capital equipment after the company's year-end, the CEO can defer recognizing the capital gains until the following year, thereby delaying the payment of taxes. This is a legal tax planning strategy commonly used by businesses to optimize their tax liabilities.