Richmond Consultants is a partnership with three architects as members. The partnership provides services throughout their local
Question:
Richmond Consultants is a partnership with three architects as members. The partnership provides services throughout their local region. The partnership began operations on July 1, of the current year.
While the partners themselves will undertake much of the work required by their carious contracts, some smaller projects may be contracted out. These outside contracts will require the architect to undertake a well defined project for a fixed fee, plus related expenses. The partners are uncertain as to the need for source deductions (income tax, EI, and CPP contributions) on amounts paid to these individuals.
The partners have hired you to assist them with some of the tax issues that will arise in the operation of the partnership.
Required:
A. Explain to the partners how business income from partnerships is taxed in Canada.
B. Explain to the partners what choice they have in selecting a year end for their business.
C. Advise the partners on whether source deductions will be required on the amounts paid to the outside architects.
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield