Question
With respect to the refundable Part I tax on investment income, which of the following statements is NOT correct? It is always equal to 30-2/3
With respect to the refundable Part I tax on investment income, which of the following statements is NOT correct?
| It is always equal to 30-2/3 percent of aggregate investment income. | ||
| It is a designated portion of the regular Part I tax. | ||
| It is only applicable to Canadian controlled private corporations. | ||
| It only becomes refundable when dividends are paid. |
A Ltd. is a Canadian-controlled private corporation which operates a chain of fast-food restaurants. In its most recent fiscal year, the company had the following financial results. Active business income eligible for the small business deduction was $300,000. Taxable capital gains= 10,000. Foreign investment income= 50,000. Investment income earned in Canada= 60,000. Net income for tax purposes= $420,000.Taxable income= $420,000. A Ltd. paid no foreign taxes on its foreign investment income and has no associated corporations. Part tax = 42,561.Which one of the following amounts represents the refundable portion of Part I Tax? Which RDTOH account would increase as a result?
| Refundable portion of part I tax is $36,804 increasing the NERDTOH | ||
| Refundable portion of part I tax is $36,804 increasing the ERDTOH | ||
| Refundable portion of part I tax is $33,737 increasing the NRDTOH | ||
| Refundable portion of part I tax is $44,720 increasing the ERDT |
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-1118096895
