VTL Limited is a Canadian-controlled private corporation with its first fiscal year ended December 31, 2016. The following data resulted in the indicated computation of taxable income and Part I tax payable:

¹10²/3 X lesser of:
(1) All ($3,000 + $4,500 - $700) = $6,800
(2) TI - SBD amount ($155,360 - $148,560) = $$6,800

²There is no tax reduction in this case, since all active business income is eligible for the small business deduction and any other income of this CCPC is aggregate investment income.

REQUIRED

Compute the refundable dividend tax on hand at the end of the 2016 taxation year and the dividend refund for the 2016 taxation year.

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Taxable dividends paid during the year Active business income (assume equal to income eligible for the small business deduction) Investment income: Taxable capital gains less allowable capital losses Net income from property: Canadian-source rental income Total investment income Dividends (eligible for deduction under sec. 112 from non-connected Canadian-resident public corporations) Total net income Deduct: dividends net capital losses Taxable income Part I tax on taxable income: Tax @ 38% on $155,360 Deduct: Federal tax abatement (10% of $155,360) Net amount Add: Additional refundable tax (10/3 × $6,800¹) Deduct: $ 3,000 Small business deduction (17.5% of $148,560) Tax reduction² Total federal tax under Part I Provincial tax (assumed) @ 10% of $155,360 Total tax 4,500 25,998 Nil $ 30,000 $148,560 7,500 13,000 $169,060 13,000 700 $155,360 $ 59,037 15,536 $ 43,501 725 $ 44,226 25,998 $ 18,228 15,536 $33,764