I need some helps for the tax planning assignment. I attached the document below. Thank you

COMMERCE 452 - ASSIGNMENT ONE (FEB 8) You can do the assignment in pairs or individually. If you decide to do it in pairs, please hand in only one copy with both your names on the assignment. Question 1: Comparison investment inside and outside RRSP Duane Pipe has $10,000 cash and considers making an investment into an RRSP. Duane will be retiring in 40 years and will cash out all your investments. Assume a 40% marginal tax rate throughout the investment horizon, and a 25% tax rate in the year of retirement (e.g. the 40th year) and all after-tax cash flows are re-invested in the same investment. Duane only has $6,000 of RRSP room (for simplicity, do not consider future RRSP room creation). He is considering three investments (rates of returns have been risk-adjusted): a. GIC with an interest rate of 6% b. Shares of ABC with a growth rate of 4% (no dividend) c. No growth shares that pays annual dividend of 5%. Note that the inclusion rate for dividend income is 65%. Please advise on the appropriate investment strategy to maximize his after-tax future value at the time of retirement. Question 2: Over-contribution to an RRSP of $2,000 Anne Teak has maxed out her RRSP contribution room and considers over contributing her RRSP to the limit of $2,000. Anne has a marginal tax rate of 30% and expects this to remain constant. The investment is a money market fund that has a return of 7% (e.g. interest income). (a) What is the minimum number of years that Anne must hold the RRSP investment before withdrawing from the RRSP in order to make the over-contribution worthwhile? (b) How would your answer change in (a) if her tax rate increases? (c) How would your answer change in (a) if the return of the investment increases? Question 3: Income Splitting Bill and Hilary are married. Hilary has a marginal tax rate of 40%, while Bill has a marginal tax rate of 0% for the first $15,000, 25% on the next $11,000 and 40% thereafter. Hilary has $1,000,000 in a GIC in an open investment that earns 3% per annum. Both Hilary and Bill have maximized their respective RRSP and TFSA contribution and do not have any contribution room left. Hilary has heard of income splitting to take advantage of Bill's lower tax rate. The current prescribed interest rate is 1%. Assume an investment horizon of 5 years and all facts are the same over this investment horizon. 1 A. What would happen from a tax perspective if Hilary gifted the GIC to Bill? Describe the income inclusion and deductions of both individual relating to the gifting of the GIC from Hilary to Bill. B. Devise an income splitting strategy for Hilary and Bill. Please show in a detailed computation the increase (if any) in the after-tax future value cashflow from the strategy. C. How would your answer change in Part A if the lawyer charges $20,000 to implement the tax plan in the first year and $10,000 per year to maintain the tax plan for the remainder of the investment horizon? D. Describe at least three non-tax factors that Bill and Hilary should consider before implementing any income splitting strategies. Question 4: Implicit and explicit tax There are three investments that are similarly risked. Investment A is fully-taxed with a pre-tax rate of return of 10%. Investment B is partially-taxed with a pre-tax rate of return of 8%. Investment C is tax-exempt with a pre-tax rate of return of 6%. A. Compute the implicit tax and explicit tax of the above investments. B. Compute the respective inclusion rates for all the investments. 2