MGAD65H3 Lecture Notes - Lecture 12: Tax Deferral, Foreign Tax Credit, Credit Union

• School: UTSC
• Department: Financial Accounting
• Course: MGAD65H3
• Professor: Sathees Ratnam

Document Summary

Ch12 integration of business & investment income of the private co. Must be a ccpc throughout the taxation yr. Calculate as 17. 5% of (cid:862) ca(cid:374)adia(cid:374) a(cid:272)ti(cid:448)e (cid:271)usi(cid:374)ess i(cid:374)(cid:272)o(cid:373)e(cid:863) up tp k. Any canadian business income other than specified investment business(sib) or personal service business (psb) r part of active business income. Non-active business income: property income like interest, dividend, cg, royalities, rent from leasing of real property. For 1 &2, ensure that foreign income not taxed in canada, because of the foreign tax credit, is removed from taxable income: taxable income exempt from tax. T c) the annual business limited (up to k)-> need to be shared among associated co. If the (cid:272)o"s e(cid:374)tire i(cid:374)(cid:272)o(cid:373)e is eligi(cid:271)le for bd-> the effective federal tax rate=10. 5% Income that get sbd is not eligible for m&p deduction, general rate deduction (13%) (cid:894)sa(cid:373)e i(cid:374)(cid:272)o(cid:373)e does(cid:374)"t re(cid:272)ei(cid:448)e dedu(cid:272)tio(cid:374) t(cid:449)i(cid:272)e(cid:895)