Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are a shareholder in a business that owns real estate assets. The business earns $5,000before taxes. Once any taxes required are paid at the

  • You are a shareholder in a business that owns real estate assets. The business earns

    $5,000before taxes. Once any taxes required are paid at the business level, the business will distribute the rest of its earnings to its owners.

    Suppose that in Canada, the corporate tax rate is 32%, the personal tax rate on dividend income is 24%and the personal tax rate on other income is48%.

    1. Assuming no funds from the earnings are retained in the business, how much is left for the owners after all taxes are paid?

    1. 2. Assume this business is a corporation and the owners hold their shares in a taxable account.
    1. 3. Assume this business is a corporation and the owners hold their shares in a TFSA.
    1. 4. Assume this business is a limited partnership and the owners hold their units in a taxable account.
    1. 5. Assume this business is a limited partnership and the owners hold their units in a TFSA.
    1. 6. What other business forms would give the same results as found in 3 and 4?  

Step by Step Solution

There are 3 Steps involved in it

Step: 1

1 To find out how much is left for the owners after all taxes are paid we first need to calculate th... 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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Accounting questions