Rainbow Co. is a Canadian controlled private corporation with active business income of $350,000 in 2020. The company engages in retail and wholesale activities. Capital gains recognized by the company in 2020 totaled $84,000. Rainbow Co. will utilize a net capital loss carry-over of $28,000 on its 2020 tax return. Required:
Rainbow Co. is a Canadian controlled private corporation with active business income of $350,000 in 2020. The company engages in retail and wholesale activities. Capital gains recognized by the company in 2020 totaled $84,000. Rainbow Co. will utilize a net capital loss carry-over of $28,000 on its 2020 tax return. Required:
Chapter12: Tax Credits And Payments
Section: Chapter Questions
Problem 23P
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Rainbow Co. is a Canadian controlled private corporation with active business income of $350,000 in 2020. The company engages in retail and wholesale activities.
Required:
Calculate the following for Rainbow Co. for 2020:
A. Net Income for Tax Purposes
B. Taxable Income
C. Part I Federal Tax - Identify amounts for 1) basic federal tax, 2) federal abatement, 3) refundable tax on investment income, 4) small business deduction, 5) general rate reduction), and 6) the total federal tax.
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