Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help Stephen Lee has an unincorporated business that he anticipates will have active business income of $98,000 for the taxation year ending December 31,

please help

image text in transcribed
Stephen Lee has an unincorporated business that he anticipates will have active business income of $98,000 for the taxation year ending December 31, 2020. Mr. Lee has employment income in excess of $800,000 with additional amounts subject to a provincial tax rate of 16 percent. The provincial dividend tax credit is equal to 4/13 of the dividend gross up for non-eligible dividends. Also in this province, the corporate tax rate is 3 percent on income eligible for the small business deduction and 15 percent on other income. Mr. Lee has asked your advice as to whether he should incorporate this business. Advise him with respect to any tax deferral that will be available on income left in the corporation and on any tax savings that will be available if all of the income is paid out in 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_2

Step: 3

blur-text-image_3

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

Fundamental Accounting Principles

Authors: John J Wild, Ken Shaw

25th Edition

1260247988, 978-1260247985

More Books

Students also viewed these Accounting questions

Question

Determine Leading or Lagging Power Factor in Python.

Answered: 1 week ago