Tax Planning by cck10867

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									                                  Tax Planning
TAX305/ebb27ed4-5487-458f-ba72-1e35101e7692.xls                        A MURDOCH 8/17/2010

     Assumptions                               Calculations

       1,000 Initial investment
          0% Initial tax rate (set to zero unless RRSP-type)
            1 Taxed currently? (1 = yes, 0 = no)

Before-tax                      Opening            Taxes Closing
rate of return Tax rate Period investment Earnings paid investment
           0%      30%       -1     1,000        0     0      1,000
           0%      30%        0     1,000        0     0      1,000
          10%      30%        1     1,000     100     30      1,070
          10%      30%        2     1,070     107     32      1,145
          10%      30%        3     1,145     114     34      1,225

Calculations using the formulas (assuming last period rates hold for all periods)
              Taxed currently       1,225
              Taxes deferred        1,232
              RRSP-type             1,331




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