Waterloo Wholesale Ltd. (WWL) is wholly owned by Barbara, a resident of Canada, who also owns allof the shares of Kitchener Closets Ltd. (KCL). Both corporations have a December 31 year-end. KKLhad both active business income and taxable income of $180,000 for its most recent taxation year.Barbara has decided to allocate as much of the small business limit as is needed to maximize the smallbusiness deduction for KKL. Most of WWL’s income is from an active business carried on in Canada. The following additionalthe information pertains to WWL:• Recapture of CCA on sale of operating assets $2,500• Net taxable capital gains 3,000• Charitable donations 1,500• Division B net income for tax purposes 180,000What is the appropriate small business deduction for WWL for 2020?
Waterloo Wholesale Ltd. (WWL) is wholly owned by Barbara, a resident of Canada, who also owns all
of the shares of Kitchener Closets Ltd. (KCL). Both corporations have a December 31 year-end. KKL
had both active business income and taxable income of $180,000 for its most recent
Barbara has decided to allocate as much of the small business limit as is needed to maximize the small
business deduction for KKL.
Most of WWL’s income is from an active business carried on in Canada. The following additional
the information pertains to WWL:
• Recapture of CCA on sale of operating assets $2,500
• Net taxable
• Charitable donations 1,500
• Division B net income for tax purposes 180,000
What is the appropriate small business deduction for WWL for 2020?
(a) $31,140
(b) $31,860
(c) $31,950
(d) $32,400
(e) 33,630
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