13:13
i heard the group interview is really chill and I'm kinda excited to do it
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Simple English definitions for legal terms
income-shifting
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A quick definition of income-shifting:
Income-shifting is when someone moves their money to someone else who has a lower tax rate, like a child, to pay less taxes. This is sometimes done by creating a special type of trust called a Clifford trust. Taxes are money that the government collects from people, businesses, and things like property to pay for things that everyone needs. Sometimes taxes are paid in money, but not always. Accrued tax is when someone owes taxes but hasn't paid them yet. The accumulated-earnings tax is a penalty for companies that keep their profits instead of giving them to shareholders as dividends. An admission tax is a fee you pay to get into a special event.
A more thorough explanation:
Definition: Income-shifting is the practice of transferring income to a taxpayer in a lower tax bracket, such as a child, to reduce tax liability. This is often done by forming a Clifford trust.
Example: A parent transfers ownership of a rental property to their child who is in a lower tax bracket. The child then receives the rental income and pays a lower tax rate on it than the parent would have.
This example illustrates income-shifting because the parent is transferring ownership of the rental property to their child to reduce their tax liability. The child is in a lower tax bracket and will pay a lower tax rate on the rental income than the parent would have.
Definition: Tax is a monetary charge imposed by the government on persons, entities, transactions, or property to yield public revenue. It includes duties, imposts, and excises.
Example: Sales tax is a tax imposed on the purchase of goods and services. When you buy a new phone, you pay a percentage of the purchase price as sales tax.
This example illustrates tax because the government imposes a charge on the purchase of goods and services, which is paid by the consumer as sales tax. The revenue generated from sales tax is used to fund public services and programs.