Question
Mr. Davis Smith owns publicly traded shares which, during 2019, paid eligible dividends of $10,200. His Taxable Income for this year exceeds $300,000 and he
Mr. Davis Smith owns publicly traded shares which, during 2019, paid eligible dividends of $10,200. His Taxable Income for this year exceeds $300,000 and he lives in a province where the maximum individual tax rate is 16 percent. The provincial tax credit on eligible dividends is equal to 29 percent of the gross up. Determine the total federal and provincial tax that will be payable on these dividends and his after tax retention. During 2019, Ms. Mary Smith, Davids wife, receives $5,600 in non-eligible dividends from taxable Canadian corporations. Her income is such that this additional amount will be taxed at a 26 percent federal rate and a 10 percent provincial rate. On such non-eligible dividends, the province has a dividend tax credit equal to 38 percent of the gross up. Determine the total federal and provincial tax that will be payable on these dividends and her after tax retention. need step by step answer with explanation of rules...
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