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Lecture 7

AFM362 Lecture Notes - Lecture 7: Full Rate, Small Business

Accounting & Financial Management
Course Code
Andrew Bauer

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Mod 7: Taxable income / taxes payable - corporation
Overview: Taxable Income
Selected Division C Deductions
Taxable income can’t be less than 0
Taxable Dividends
Included in Division B, deducted in Division C
Qualifying dividends include those from:
Taxable Canadian corporations (our focus);
Taxable subsidiary corporations resident in Canada;
Non-resident corporations carrying on business in Canada; and
Foreign affiliates which have been appropriately taxed in a foreign jurisdiction which has treaty
with Canada.
If connected corporation, can deduct 100%
Charitable Donations
Deductible under Division C for corporations
Limited to 75% of corporation’s net income for tax purposes under Division B
Carry forward 5 years
Loss Carryovers
Same rules for corps as for individuals
Non-capital loss
Deductible against any type of income
Carry back 3 years and forward 20 years
Net capital loss
Deductible against net taxable capital gains in the current year (3(b) income)
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