Ch. 33 - Shareholder Manager Remuneration

Question 1

Perfect Integration

1. Gross up equals
2. DTC equals

Answer 1

1. The corporate pretax income

2. the tax paid by the company

Question 2

TOSI - three exclusions

Answer 2

1. Excluded businesses
2. Excluded shares
3. Reasonable returns

Question 3

TOSI - Excluded businesses
- what is it
what is threshhold

Answer 3

• If the family member is engaged on a regular, continuous and substantial basis, TOSI won’t apply
• 20 hours per week in current year

Question 4

TOSI - Excluded shares

- what is it

Answer 4

• income received by a family member who is 25 or older and all apply:
  1. the income is received on shares that represent 10% of votes and value,
  2. Less than 90% of the corporate income is earned from the provision of services, and
  3. the shares are not shares of a professional corporation

Question 5

TOSI - Reasonable returns

• what is it
• factors to consider reasonable

Answer 5

• applies to family members 25 or older and the amount received is reasonable for the contribution to the business
• reasonable:
  1. work performed
  2. property contributed
  3. risks assumed
  4. payments made in the past to the family member