Determine Sweat s small business deduction for the year ending December 31, 2021.
Sweat Inc. is a CCPC throughout the year and is not associated with any other corporation. For the year ending December 31, 2021, Sweat has Net Income for Tax Purposes of $422,000. This amount is made up of dividends from taxable Canadian corporations of $22,000, active business income of $380,000, and foreign non-business income of $20,000. The foreign income was subject to withholding in the foreign jurisdiction at a rate of 13 percent. Sweat receives a foreign tax credit against federal Tax Payable that is equal to the amount withheld. Sweat has a non-capital loss carry forward of $145,000 which it intends to deduct during 2021. The AAII for Sweat Inc. in the prior year was $35,000 and the TCEC for Sweat Inc. in the prior year was $375,000. Determine Sweat s small business deduction for the year ending December 31, 2021.
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