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Can you plz provide a detailed answer with formulas? Previous answer does not show where the amounts are from Expert Q&A Done ABC Inc. is
Can you plz provide a detailed answer with formulas?
Previous answer does not show where the amounts are from
Expert Q&A Done ABC Inc. is a Canadian controlled private corporate with December 31 taxation year-end. ABC Inc. is associated with three other companies. The annual business limit for the small business deduction is shared equally by ABC and these companies. The $125,000 allocation is significantly less than the Company's active business income for 2020. At January 1, 2020, the balance in the Company's Non-Eligible RDTOH was $25,000. On this date, the Company had nil balances in both its GRIP and its Eligible RDTOH. During the taxation year ending December 31, 2020, ABC had Taxable Income of $325,000. The Part I Tax Payable for the year was correctly calculated to be $56,500. The Company's Net Income For Tax Purposes does not include any foreign source income and no net capital losses were deducted in determining Taxable income. Its Net Income For Tax Purposes includes the following amounts of non-operating income: Capital Gains $80,000 Net Rental Income From Residential Properties 10,000 Eligible Dividends From Canadian Public Companies 21,914 Dividends From Connected Company (See Note) 45,680 Note - These dividends, all of which were non-eligible, were received from XYZ Inc., another CCPC. ABC owns 40 percent of this company's voting shares. As a consequence of paying this dividend, XYZ received a dividend refund of $11,000 in total. ABC Inc. paid taxable dividends of $50,000 during the year. It is the policy of the corporation to designate dividends as eligible only to the extent that a dividend refund will be available on their payment. For 2019, ABC and its associated companies had combined ADJUSTED Aggregate Investment Income of $41,500. Their Taxable Capital Employed in Canada totaled $1,900,000 for 2019. Required: Show full calculations and organize your steps properly in your response for the following - Be sure to round your answers to the nearest dollar amount: A. Determine the Refundable portion of ABC's Part I Tax Payable for 2020. B. Determine ABC'S Part IV Tax Payable for 2020. C. Determine the December 31, 2020 balances in ABC's Eligible RDTOH and its Non-Eligible RDTOH. D. Determine ABC's 2020 Dividend Refund, providing separate amounts for refunds on eligible dividends and refunds on non-eligible dividendsStep by Step Solution
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