Tax Issues Associated with Financial Planning

Understanding the tax consequences of your financial planning decisions is very important. These decisions may sometimes have life-long consequences in addition to a one-time result.

For example, when a person decides to save for retirement, there are tax consequences for each year when money is added to the account as well as when it grows. There are additional consequences later when that person decides to retire and use the money to live on.

This assignment looks at another example of tax issues associated with financial planning. You will look at the use of tax-exempt investment instruments such as municipal bonds, as an alternative to traditional investments, and corporate bonds or stocks.

Consider the following:

Bill Smith, a manager of a restaurant/bar in Los Angeles, is in the 25% marginal tax bracket and pays an additional 5% in taxes to the state of California. Bill has $20,000 invested in corporate bonds which is currently earning an average annual return of 7.5%.

Additionally, Bill also has another $20,000 invested in municipal bonds from the city of Los Angeles that are being used to redevelop depressed areas downtown. These bonds pay an average return of 5.4%.

Assume that in both cases, Bill earns the same returns as calculated on both the corporate and municipal bonds each year for the next 15 years.

Answer the following:

• What is the after-tax return on Bill’s corporate bonds for the current year?
• What is the after-tax return on his municipal bonds for the current year?
• Which investment earns more returns: corporate or municipal bonds?
• What would the balance in each account be at the end of the fifteenth year?

Present the calculations and answers in Excel spreadsheet format or in Word format. Write the interpretation of results in a Word document. Apply APA standards to citation of sources. :

By Wednesday, October 16, 2013, deliver your assignment to the.

Assignment 2 Grading Criteria	Maximum Points
Correctly computed the tax calculations showing the formulae and the necessary steps.	32
Analyzed the calculations to draw valid conclusions on the investments.	48
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.	20
Total:	100

 

 

 

which political figure is most associated with the idea of nullification?

Can someone do a 750 word article critique in APA format on the following? cornell HR review TALENT MANAGEMENT IN A TURBULENT WORLD Winnie Kwan How does an HR practitioner manage a company’s talent pipeline through a period of social, economic, and environmental volatility? Last week, Hugh Mitchell, Chief Human Resources & Corporate Officer of Royal Dutch Shell plc, discussed this issue with students and faculty at Cornell University’s ILR School as part of the CAHRS Executive Guest Lecture Series. Mitchell argued that organizations needed to develop stronger, longer-term employment strategies in response to unstable periods of recession and growth. According to Mitchell, organizations are confronted with an ever-growing amount of “discontinuities.” He cited the Enron scandal, the 9/11 attacks, and the Gulf of Mexico oil spill as examples of disruptive events that have heightened consumer anxiety over business. Furthermore, these discontinuities fostered expectations for more extensive government intervention and regulation within the economy. In response to such fast- changing economic landscapes, firms need to foster their HR teams into steadfast sources of support for their core business. Shell, for instance, has established training programs at business schools in the United States and Europe to bolster employee understanding of areas outside of HR such as marketing, strategy development, and client analysis. Cultural and environmental training at specific sites is available as well to better equip HR with the necessary knowledge to confront external challenges. While operating in such turbulent and cyclical industries, HR teams should also focus on long-term, probabilistic modeling, which would advance them in the bidding war for talent. Mitchell laid out the following tactics as key components in Shell’s HR planning: Focus on “non-commodity talent.” Certain individuals are “commodity talent.” Sales teams, for instance, exhibit transferable, “commodity” skill sets and can be taught industry-specific practices. Companies should grow internal pools of “non- commodity” talent, such as individuals with technical expertise specific to a sector. Investments in “non-commodity” skills would build a steady pipeline of talent and minimize reliance on the labor market. Grow talent through experiential learning. Shell nurtures role development through providing staff with short, broadening rotations; international assignments; accredited professional learning programs; and global leadership training. With employees in over 100 countries, HR leaders at Shell need to be capable of collaborating with global business leaders to acquire and manage talent in an array of economic climates. In addition to the wealth of staff development programs at Shell, Mitchell stressed the importance of on-the job learning and sending employees out into the field early on in their careers. Establish a mechanism for spotting future leaders. Shell utilizes a transparent ranking system of employee potential and performance. Skill pool managers help oversee competence assessments for individuals from their own disciplines. Partner with local stakeholders. When setting up in an emerging market, start slowly and partner with local players. Mitchell emphasized the importance of proceeding with humility and adapting diversity initiatives to each local environment. Engage in scenario planning. HR teams should explicitly define potential risks in different situations and outline their possible collective impact on workforce planning. This practice will prevent assumptions of stability and feelings of complacency while keeping the organization flexible in the face of change. It is becoming increasingly difficult for organizations to establish a sense of constancy in a world of growing unpredictability. However, through future-oriented mapping techniques such as those that Mitchell described, organizations will be able to mitigate external risks by making robust investment decisions regarding their talent development. א Winnie Kwan is a student at Cornell University, pursuing an MILR at the School of Industrial & Labor Relations. She serves on the editorial board of the Cornell HR Review. 2 © 2010 Cornell HR Review Copyright of Cornell HR Review is the property of Cornell HR Review and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.

I also attached 2 examples of this homework.