Linda, a resident of Canada, owns 100 % of the common shares of both Windsor Retail Ltd. (“WRL”) and Yellowknife Klosets Ltd. (“YKL”). Both corporations have a August 31 year- end. “YKL” had BOTH active business income AND taxable income of $ 24,000 for its 2020 taxation year. Barbara has decided to allocate to “YKL” as much of the small business limit as is needed to maximize the small business deduction for “YKL”, with the remaining balance of the available annual business limit allocation being made to “WRL”. Most but not all of “WRL” ’s income is from an active business carried on in Canada. The following information pertains to “WRL” for its 2020 taxation year: Division B net income for tax purposes $ 210,000 • Net taxable capital gains 12,000 • Charitable donation contributions 5,000 ? Dividends from taxable Canadian corporations 18,000 The small business deduction for “WRL” for 2020 should be: $ 39,900 $ 35,530 $ 34,200 $ 37,620 None of the above
Linda, a resident of Canada, owns 100 % of the common shares of both Windsor Retail Ltd. (“WRL”) and Yellowknife Klosets Ltd. (“YKL”). Both corporations have a August 31 year- end.
“YKL” had BOTH active business income AND taxable income of $ 24,000 for its 2020
The following information pertains to “WRL” for its 2020 taxation year:
Division B net income for tax purposes $ 210,000
• Net taxable
• Charitable donation contributions 5,000
? Dividends from taxable Canadian corporations 18,000
The small business deduction for “WRL” for 2020 should be:
- $ 39,900
- $ 35,530
- $ 34,200
- $ 37,620
- None of the above
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