Ch. 10 - Business Income - PSB

Question 1

What is a PSB:

1. General
2. Unless

Answer 1

1. An incorporated business providing services where
   a. a specified shareholder performs service on behalf of the company, and
   b. the individual would be seen as an employee if not for the corporation
2. Unless
   a. the corp employs more than 5 full timers during the year, or
   b. the services are provided to an associated corporation

Question 2

Taxation on PSB Income

• eligibility
• federal tax rate

Answer 2

• not eligible for the SBD
• not eligible for the general rate reduction
• 33%

Question 3

Deductions for PSB Income

Answer 3

• salary paid to the incorporated employee
• benefits / allowances provided to the incorporated employee
• expenses that would be deductible for employment income
• legal expenses incurred for collecting fees