Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

It is about Canadian Income Tax, all information provided (Part I And Part IV Refundable Taxes, GRIP) Fuzon Ltd. is a Canadian controlled private corporation.

image text in transcribed

It is about Canadian Income Tax, all information provided

(Part I And Part IV Refundable Taxes, GRIP) Fuzon Ltd. is a Canadian controlled private corporation. It has been in operation for several years and has a December 31 year end. For the taxation year ending December 31, 2020, its Net Income For Tax Purposes was made up of the following components: Active Business Income $423,400 Dividends From Canadian Corporations: Wholly Owned Subsidiary (All Non-Eligible) 223,600 Portfolio Investments (All Eligible) 101,400 Canadian Source Interest 48,300 Taxable Capital Gains [(1/2)($223,500)] 111,750 Net Income For Tax Purposes $908,450 Dividends paid to Fuzon Ltd. by the wholly owned subsidiary during 2020 did not result in a dividend refund. The wholly owned subsidiary has been allocated one-half of the annual business limit for the small business deduction, with the remainder to be used by Fuzon. At January 1, 2020, Fuzon had the following balanaces: Eligible RDTOH $ 28,137 Non-Eligible RDTOH 111,263 GRIP 73,400 During 2019, Fuzon Ltd. paid no dividends. For 2019, the ADJUSTED Aggregate Investment Income of Fuzon and its associated subsidiary was $42,000. Their Taxable Capital Employed in Canada was $4,650,000 for 2019. On September 4, 2020, Fuzon paid taxable dividends to its shareholders in the amount of $265,600. It is the policy of the corporation to designate dividends as eligible only to the extent that a refund will be available on their payment. Required: For Fuzon's 2020 taxation year, calculate the following items: A. Federal Part I Tax Payable. B. The refundable portion of Part I Tax Payable C. Part IV Tax Payable. D. The balance in the GRIP account on December 31, 2020. E. The balances in the Eligible RDTOH and the Non-Eligible RDTOH on December 31, 2020. F. The dividend refund, showing separately the amounts refunded on eligible and non-eligible dividends. (Part I And Part IV Refundable Taxes, GRIP) Fuzon Ltd. is a Canadian controlled private corporation. It has been in operation for several years and has a December 31 year end. For the taxation year ending December 31, 2020, its Net Income For Tax Purposes was made up of the following components: Active Business Income $423,400 Dividends From Canadian Corporations: Wholly Owned Subsidiary (All Non-Eligible) 223,600 Portfolio Investments (All Eligible) 101,400 Canadian Source Interest 48,300 Taxable Capital Gains [(1/2)($223,500)] 111,750 Net Income For Tax Purposes $908,450 Dividends paid to Fuzon Ltd. by the wholly owned subsidiary during 2020 did not result in a dividend refund. The wholly owned subsidiary has been allocated one-half of the annual business limit for the small business deduction, with the remainder to be used by Fuzon. At January 1, 2020, Fuzon had the following balanaces: Eligible RDTOH $ 28,137 Non-Eligible RDTOH 111,263 GRIP 73,400 During 2019, Fuzon Ltd. paid no dividends. For 2019, the ADJUSTED Aggregate Investment Income of Fuzon and its associated subsidiary was $42,000. Their Taxable Capital Employed in Canada was $4,650,000 for 2019. On September 4, 2020, Fuzon paid taxable dividends to its shareholders in the amount of $265,600. It is the policy of the corporation to designate dividends as eligible only to the extent that a refund will be available on their payment. Required: For Fuzon's 2020 taxation year, calculate the following items: A. Federal Part I Tax Payable. B. The refundable portion of Part I Tax Payable C. Part IV Tax Payable. D. The balance in the GRIP account on December 31, 2020. E. The balances in the Eligible RDTOH and the Non-Eligible RDTOH on December 31, 2020. F. The dividend refund, showing separately the amounts refunded on eligible and non-eligible dividends

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advances In Quantitative Analysis Of Finance And Accounting (Vol. 5)

Authors: Lee Cheng Few

1st Edition

9812706283, 9789812706287

More Books

Students also viewed these Accounting questions