Planit:Entering Other Revenues Exercise Answer Key

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Canada English

=== Question 1 === Debbie is expecting to receive a {{{inheritance amount}}} inheritance from her parents in about {{{years till inheritance}}} years. What did you enter for the following data entry fields for the inheritance? Amount Per Year: $_____ To Year:_____ Percent Taxable:_____%  % Amount on Disability:_____% Model As:_____ Contents 1 Answer: 2 Question Two: 2.1 Answer: 3 Question Three: 3.1 Answer: 3.2 Answer: 4 Question Two: 4.1 Answer: 5 Question Three: 5.1 Answer: 5.2 Answer: 6 Question Two: 6.1 Answer: 7 Question Three: 7.1 Answer: Answer: Proceed to the Pensions and Other Revenues screen. 1. Click on the Add button at the top of the screen. Amount Per Year: $100000 To Year: {{{years till inheritance}}} years from the current year Percent Taxable: 0% Note: For Islamic client paying zakat, the Percent Taxable should be set 2.5% higher than the % Taxable indicated above. We are assuming this extra income will be used to invest in financial assets and thus subject to zakat. This 2.5% of the revenue will not be paid immediately, since the client might object, but is just used to show that not all of this revenue will be available for investment or lifestyle after the end of the year. Amount on Disability: 100% Model As: Fixed Period (Inheritance date will not change based on retirement age) 2. You will also have to enter information for additional fields to properly complete the entry of the inheritance: Owner: Spouse; From Year: {{{years till inheritance}}} years from the current year (since the inheritance will only pay out once); Index Rate: 0% (this could be changed if the inheritance is likely to increase between now and when it is received, but 0% is a conservative assumption); Amount on Death: 0%. 3. Click Save. Question Two: Julie Evans plans to sell her residence when she retires at age {{{retirement age}}}, and buy a small houseboat instead. The houseboat is worth {{{value of houseboat}}}, and her current residence {{{value of residence}}}. There are no assumed transaction costs. Input this data into the Pensions and Other Revenues screen for the client. What did you enter for the following data entry field for the residence downsize? Amount Per Year: $____ To Year:____ Percent Taxable:____%  % Amount on Disability:____% Model As:____ Answer: Go straight to the Pensions and Other Revenues screen, where you can add her residence downsize:] 1. Click on the Add button at the top of the screen. Amount Per Year: {{{amount per year}}} (Value of the house minus the value of the houseboat) To Year: 6 years from the current year (the year she retires) Percent Taxable:0% Note: For Islamic client paying zakat, the Percent Taxable should be set 2.5% higher than the % Taxable indicated above. We are assuming this extra income will be used to invest in financial assets and thus subject to zakat. This 2.5% of the revenue will not be paid immediately, since the client might object, but is just used to show that not all of this revenue will be available for investment or lifestyle after the end of the year. Amount on Disability: 100% Model As: Defer with Retirement (the entire goal would be pushed back until she retires, not just the start year). 2. You will also have to enter information for additional fields to properly complete the entry of the inheritance: Owner: Client; From Year: 6 years from the current year (since the residence change will only happen once); Index Rate: 0% (this could be changed if the amount is likely to increase between now and when it takes place, but 0% is a conservative assumption); Amount on Death: 0%. 3. Click Save. Question Three: {{{age}}}-year old Kathy Black owns a small Spa with an ACB of {{{amount taxable}}} that she plans to sell when she retires at age {{{retirement age 2}}}. The business is currently worth {{{value of business}}}. She expects the business will grow at a rate of {{{growth rate}}} every year. What would you put into the following data fields on the detailed Pensions screen? To Year:____ Percent Taxable:____%  % Amount on Death:____% Model As:____ Answer: Many countries have different rules for the taxation and sale of a business. To enter this other revenue properly you should refer to the link for your country below: Canada, United Kingdom, Singapore, Malaysia.

United States of America
{{{United States Workbook Template}}}

Argentina
{{{Argentina Workbook Template}}}

Brazil
{{{Brazil Workbook Template}}}

United Kingdom

=== Question 1 === Kathy is expecting to receive a {{{inheritance amount}}} inheritance from her parents in about {{{years till inheritance}}} years. What did you enter for the following data entry fields for the inheritance? Amount Per Year: $_____ To Year:_____ Percent Taxable:_____%  % Amount on Disability:_____% Model As:_____ Answer: Proceed to the Pensions and Other Revenues screen. 1. Click on the Add button at the top of the screen. Amount Per Year: {{{Inheritance amount}}} To Year: {{{years till inheritance}}} years from the current year Percent Taxable: 0% Note: For Islamic client paying zakat, the Percent Taxable should be set 2.5% higher than the % Taxable indicated above. We are assuming this extra income will be used to invest in financial assets and thus subject to zakat. This 2.5% of the revenue will not be paid immediately, since the client might object, but is just used to show that not all of this revenue will be available for investment or lifestyle after the end of the year. Amount on Disability: 100% Model As: Fixed Period (Inheritance date will not change based on retirement age) 2. You will also have to enter information for additional fields to properly complete the entry of the inheritance: Owner: Spouse; From Year: {{{years till inheritance}}} years from the current year (since the inheritance will only pay out once); Index Rate: 0% (this could be changed if the inheritance is likely to increase between now and when it is received, but 0% is a conservative assumption); Amount on Death: 0%. 3. Click Save. Question Two: Julie Evans plans to sell her residence when she retires at age {{{retirement age}}}, and buy a small houseboat instead. The houseboat is worth {{{value of houseboat}}}, and her current residence {{{value of residence}}}. There are no assumed transaction costs. Input this data into the Pensions and Other Revenues screen for the client. What did you enter for the following data entry field for the residence downsize? Amount Per Year: $____ To Year:____ Percent Taxable:____%  % Amount on Disability:____% Model As:____ Answer: Go straight to the Pensions and Other Revenues screen, where you can add her residence downsize:] 1. Click on the Add button at the top of the screen. Amount Per Year: {{{amount per year}}} (Value of the house minus the value of the houseboat) To Year: 6 years from the current year (the year she retires) Percent Taxable:{{{percent taxable}}} Note: For Islamic client paying zakat, the Percent Taxable should be set 2.5% higher than the % Taxable indicated above. We are assuming this extra income will be used to invest in financial assets and thus subject to zakat. This 2.5% of the revenue will not be paid immediately, since the client might object, but is just used to show that not all of this revenue will be available for investment or lifestyle after the end of the year. Amount on Disability: 100% Model As: Defer with Retirement (the entire goal would be pushed back until she retires, not just the start year). 2. You will also have to enter information for additional fields to properly complete the entry of the inheritance: Owner: Client; From Year: 6 years from the current year (since the residence change will only happen once); Index Rate: 0% (this could be changed if the amount is likely to increase between now and when it takes place, but 0% is a conservative assumption); Amount on Death: 0%. 3. Click Save. Question Three: {{{age}}}-year old Kathy Woodhaven owns a small Spa with an ACB of {{{amount taxable}}} that she plans to sell when she retires at age {{{retirement age 2}}}. The business is currently worth {{{value of business}}}. She expects the business will grow at a rate of {{{growth rate}}} every year. What would you put into the following data fields on the detailed Pensions screen? To Year:____ Percent Taxable:____%  % Amount on Death:____% Model As:____ Answer: Many countries have different rules for the taxation and sale of a business. To enter this other revenue properly you should refer to the link for your country below: Canada, United Kingdom, Singapore, Malaysia.

Russia
{{{Russia Workbook Template}}}

China
{{{China Workbook Template}}}

Malaysia
{{{Malaysia Workbook Template}}}

Singapore

=== Question 1 === May Wang is expecting to receive a {{{inheritance amount}}} inheritance from her parents in about {{{years till inheritance}}} years. What did you enter for the following data entry fields for the inheritance? Amount Per Year: $_____ To Year:_____ Percent Taxable:_____%  % Amount on Disability:_____% Model As:_____ Answer: Proceed to the Pensions and Other Revenues screen. 1. Click on the Add button at the top of the screen. Amount Per Year: $350,000 To Year: {{{years till inheritance}}} years from the current year Percent Taxable: 0% Note: For Islamic client paying zakat, the Percent Taxable should be set 2.5% higher than the % Taxable indicated above. We are assuming this extra income will be used to invest in financial assets and thus subject to zakat. This 2.5% of the revenue will not be paid immediately, since the client might object, but is just used to show that not all of this revenue will be available for investment or lifestyle after the end of the year. Amount on Disability: 100% Model As: Fixed Period (Inheritance date will not change based on retirement age) 2. You will also have to enter information for additional fields to properly complete the entry of the inheritance: Owner: Spouse; From Year: {{{years till inheritance}}} years from the current year (since the inheritance will only pay out once); Index Rate: 0% (this could be changed if the inheritance is likely to increase between now and when it is received, but 0% is a conservative assumption); Amount on Death: 0%. 3. Click Save. Question Two: {{{Female Name 2}}} {{{Last Name 1}}} plans to sell her residence when she retires at age {{{retirement age}}}, and buy a small houseboat instead. The houseboat is worth {{{value of houseboat}}}, and her current residence {{{value of residence}}}. There are no assumed transaction costs. Input this data into the Pensions and Other Revenues screen for the client. What did you enter for the following data entry field for the residence downsize? Amount Per Year: $____ To Year:____ Percent Taxable:____%  % Amount on Disability:____% Model As:____ Answer: Go straight to the Pensions and Other Revenues screen, where you can add her residence downsize:] 1. Click on the Add button at the top of the screen. Amount Per Year: {{{amount per year}}} (Value of the house minus the value of the houseboat) To Year: 6 years from the current year (the year she retires) Percent Taxable:{{{percent taxable}}} Note: For Islamic client paying zakat, the Percent Taxable should be set 2.5% higher than the % Taxable indicated above. We are assuming this extra income will be used to invest in financial assets and thus subject to zakat. This 2.5% of the revenue will not be paid immediately, since the client might object, but is just used to show that not all of this revenue will be available for investment or lifestyle after the end of the year. Amount on Disability: 100% Model As: Defer with Retirement (the entire goal would be pushed back until she retires, not just the start year). 2. You will also have to enter information for additional fields to properly complete the entry of the inheritance: Owner: Client; From Year: 6 years from the current year (since the residence change will only happen once); Index Rate: 0% (this could be changed if the amount is likely to increase between now and when it takes place, but 0% is a conservative assumption); Amount on Death: 0%. 3. Click Save. Question Three: {{{age}}}-year old Alvin Cheng owns a small Spa with an ACB of {{{amount taxable}}} that she plans to sell when she retires at age {{{retirement age 2}}}. The business is currently worth {{{value of business}}}. She expects the business will grow at a rate of {{{growth rate}}} every year. What would you put into the following data fields on the detailed Pensions screen? To Year:____ Percent Taxable:____%  % Amount on Death:____% Model As:____ Answer: Many countries have different rules for the taxation and sale of a business. To enter this other revenue properly you should refer to the link for your country below: Canada, United Kingdom, Singapore, Malaysia.

Hong Kong
{{{Hong Kong Workbook Template}}}

India
{{{India Workbook Template}}}

Caribbean
Jamaica {{{Jamaica Workbook Template}}} Trinidad and Tobago {{{Trinidad and Tobago Workbook Template}}} Barbados {{{Barbados Workbook Template}}} Bermuda {{{Bermuda Workbook Template}}} Bahamas {{{Bahamas Workbook Template}}} Puerto Rico {{{Puerto Rico Workbook Template}}}