Tax Elective 6 Flashcards
Calculate corporate federal tax on $100 active income.
$38 - 10abatement - 17sbd equals 11 percent
Calculate corporate federal tax on $100 interest income
$38 - 10abatement + 6.67 ART - 26.67refPartI equals 8
Calculate corporate federal tax on $100 above sbd and aii
$38 - 10abatement - 13 GRR equals 15 percent
Refundable part I tax is on what?
lesser of 26.67 on AII or 26.67 on taxable income above SBD or Part I tax payable
Aggregate Investment Income includes what?
Taxable Cap Gains, Interest, Rent, Foreign Dividends, Royalties
Calculate corporate federal tax on $100 M&P above SBD
$38 - 10abatement - 13 M&P equals 15 percent
Are Canadian dividends included in AII?
No
How are Canadian Dividends included in corp income?
Not included - but refundable tax in part IV
Refundable part IV tax on connected dividends
% ownership * dividend refund
How are foreign dividends included in corp income?
Aggregate INvestment Income
Are US Dividends taxed in part 1 or part IV ?
part 1 at 26.67 percent
RDTOH = last years balance less last years refund plus:
part 1 refundable tax + part IV refundable tax
How would you cleafr your RDTOH balance?
Pay 3 times as much in dividends
What goes into the CDA balance?
capital dividens received plus the non taxable portion of net capital gains (and non taxable portion of BIL) plus life insurance proceeds
What’s the advantage of SRED?
100% deductible AND get an investment tax credit
What is SRED ITC for CCPCs?
35% refundable on eligible expenses up to $3,000,000
Personal non resident income is charged on?
Canadian employment, canadian business, and dispositions of Canadian property.
The ceiling for a section 85 rollover is always:
FMV
The floor for inventory and land on an 85 rollover is:
> of fmv of boot or the lowest tax value
85 rollover floor - depreciable
> of fmv of boot or lowest tax value
85 rollover floor - CEC
> of fmv of boot or lowest tax value
Why use a section 22 for A/R?
Business loss as opposed to capital loss
Division A
Who owes tax
Division B
Net Income for Tax Purposes
Division C
Taxable Income
Dividsion E
Taxes payable calculation
How much can be taken out of RRSPs for the LLP?
Max of $20,000
How much per year can be taken out of RRSPs for the LLP?
Max of $10,000
When to RRSPs under the LLP have to be repaid?
After 5 years
Employee home office amount can’t include:
You cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.
