Canco Ltd. is a Canadian-controlled private corporation. For its fiscal year ended December 31, 20X6, Canco Ltd. had income of $105,000, comprised as follows:
• Interest income………………………………………. $20,000
• Taxable capital gains ……………………………………30,000
• Taxable dividends received from
• A Ltd. ……………………………………….40,000
• B Ltd. ……………………………………….15,000
During the same year Canco Ltd. paid taxable dividends of $16,000 and capital dividends of $4,000. Canco Ltd. owns 40% of the issued shares of A Ltd. and 5% of the issued shares of B Ltd. A Ltd. received a dividend refund of $20,000 and B Ltd. received a dividend refund of $8,000 as a result of paying dividends during their respective taxation years ended December 31, 20X6.
Required:
Determine the dividend refund for Canco Ltd. for its 20X6 taxation year. Assume the balance in its RDTOH account at January 1, 20X6 was Nil.