In 2016, Investit Limited has acquired $100,000 of Class 8 (20%) assets eligible as qualified property for
Question:
In 2016, Investit Limited has acquired $100,000 of Class 8 (20%) assets eligible as “qualified property” for the 10% investment tax credit in the Gaspe area. The corporation’s federal income tax rate after the abatement and the general rate reduction is 15%. Its taxable income before capital cost allowance on the eligible property is $30,000.
The corporation is not eligible for any other tax credits and paid no tax in the preceding three years.
REQUIRED
(1) What is the maximum investment tax credit available?
(2) Compute the net federal Part I tax payable after the investment tax credit.
(3) What is the amount of the investment tax credit available for carryover?
(4) Compute the UCC balance in Class 8 at the end of the following year, assuming the new assets are the only assets in the class.
Step by Step Answer:
Introduction To Federal Income Taxation In Canada 2016-2017
ISBN: 9781554968725
37th Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett