Cinder Inc. is a Canadian-controlled private corporation based in your province. The company operates a wholesale business. The following information is provided for its year ended May 31, 2020: 1. Net income for tax purposes is $212,000. Included in this amount is the following: Interest income from bonds Interest income on overdue trade accounts receivable Taxable capital gain on sale of land Eligible dividends from Canadian public corporations Non-eligible dividends from PQ Ltd. (see Item 2 below) $10,000 1,000 14,000 12,000 6,000 2. PO Ltd. is a Canadian-controlled private corporation. Cinder owns 60% of its common voting shares. In 2020, PQ claimed the small business deduction on $320,000 of its active business income. Po paid a non-eligible dividend of $10,000, of which Cinder's share is $6,000 (60%). As a result of the dividend, Po received a dividend refund of $1,000 from its non-eligible RDTOH. 3. Cinder made contributions of $4,000 to registered charities. This amount has been correctly adjusted for in computing net income for tax purposes. 4. The following information is from the 2019 Tax return of Cinder: $ 5,000 2,000 Non-capital losses Non-eligible refundable dividend tax on hand Eligible refundable dividend tax on hand Dividend refund Taxable capital Adjusted aggregate investment income Unders 10 million $30,000 Required: Determine Cinder's federal income tax for the 2020 taxation year. (use 0.3067 when multiplying to represent 30%%. and 0.3833 when multiplying to represent 38 1/3%. Do not multiply by more than 4 decimal places and round your final answer to the nearest dollar. Enter subtractions as negative amounts.) Net Income for tax purposes 0 Taxable income $ 0 Active business income Less: Less Less: Active business income $ 0 Aggregate Investment income $ 0 Part I tax 0 Small business deduction - 19% x least of () (10) Refundable tax on investment income 10 2/3% times the least of: General tax reduction - 13% of Less: Less: $ PART I TAX Cinder Inc. is a Canadian-controlled private corporation based in your province. The company operates a wholesale business. The following information is provided for its year ended May 31, 2020: 1. Net income for tax purposes is $212,000. Included in this amount is the following: Interest income from bonds Interest income on overdue trade accounts receivable Taxable capital gain on sale of land Eligible dividends from Canadian public corporations Non-eligible dividends from PQ Ltd. (see Item 2 below) $10,000 1,000 14,000 12,000 6,000 2. PO Ltd. is a Canadian-controlled private corporation. Cinder owns 60% of its common voting shares. In 2020, PQ claimed the small business deduction on $320,000 of its active business income. Po paid a non-eligible dividend of $10,000, of which Cinder's share is $6,000 (60%). As a result of the dividend, Po received a dividend refund of $1,000 from its non-eligible RDTOH. 3. Cinder made contributions of $4,000 to registered charities. This amount has been correctly adjusted for in computing net income for tax purposes. 4. The following information is from the 2019 Tax return of Cinder: $ 5,000 2,000 Non-capital losses Non-eligible refundable dividend tax on hand Eligible refundable dividend tax on hand Dividend refund Taxable capital Adjusted aggregate investment income Unders 10 million $30,000 Required: Determine Cinder's federal income tax for the 2020 taxation year. (use 0.3067 when multiplying to represent 30%%. and 0.3833 when multiplying to represent 38 1/3%. Do not multiply by more than 4 decimal places and round your final answer to the nearest dollar. Enter subtractions as negative amounts.) Net Income for tax purposes 0 Taxable income $ 0 Active business income Less: Less Less: Active business income $ 0 Aggregate Investment income $ 0 Part I tax 0 Small business deduction - 19% x least of () (10) Refundable tax on investment income 10 2/3% times the least of: General tax reduction - 13% of Less: Less: $ PART I TAX
