Businesses Flashcards
What portion of assets need to be used for active business activity to qualify as a Qualified Small Business Corporation
90%
How does the Capital Net Investment Loss (CNIL) work?
What will impact the capital gains exemption amount on sale of business shares?
Outline how an estate freeze works
accomplished through a Holdco where all of the common shares of an expanding company are transferred into a newly incorporated entity and the owner takes back preferred shares. Not tax event happens. ACB of preferred shares is ACB it was before as common shares, and market value is also same as before and now FIXED there, so any gain is taxable when preferreds are sold instead of now. Preferreds can be voting or non voting.
Can a business claiming the small business deduction pay an eligible dividend?
No. Eligible dividend can only be declared on a corporation that pays tax at the higher marginal corporate rate. Small business corporations that are claiming the small business deduction are not eligible to declare these dividends
What is a Capital Dividend?
A capital dividend is a tax-free dividend that a corporation can pay to its shareholders. It is sourced from the corporation’s capital dividend account (CDA), which tracks the non-taxable portion of capital gains and certain other amounts. Only private corporations are eligible to pay capital dividends. Shareholders must receive a capital dividend account statement to support the tax-free treatment of the dividend.
Which of the following is not considered in calculating the valuation of a business?
A. industry growth
B. cash flow history
C. debt levels
D. historical cost of business property
D. Historical cost of business property.
