#5) (12 Marks) White Water Canoe Ltd is a Canadian controlled private corporation with a year...

 
 

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#5) (12 Marks) White Water Canoe Ltd is a Canadian controlled private corporation with a year ending December 31, 2017. You have been asked to calculate the Part IV Tax, Refundable Dividend Tax On Hand (RDTOH) and Dividend Refund for White Water Canoe Ltd. The following information is provided to assist you in completing Schedule 3 and Page 6 & 7 of the T2 Return for White Water Canoe Ltd. Foreign business income Foreign non-business income Dividends from Big Boat Ltd (note 1) Dividends from Little Boat Ltd (note 2) Taxable capital gains Manufacturing and processing profits (note 3) Other Canadian active business income Canadian interest income Net Income Canadian dividends Charitable Donations. Net capital losses Non capital losses Taxable income $83,000 $18,000 $22,670 $21,600 $38,250 $184,230 $117,100 $78,150 $563,000 ($44,270) ($49,500) ($38,250) ($10,200) $420,780 #5) Continued Note 1 Note 2 Part 1 Tax: Base Amount White Water Canoe Lt owns 3% of the shares in Big Boat Ltd. Big Boat Ltd received a dividend refund of $8,000 Note 3 Manufacturing and processing profits were determined in compliance with regulation 5200. Most of the tax calculation have already been completed for you and you can assume that these calculations are correct. Additional refundable tax (ART) Federal tax abatement Small business deduction (note 4) White Water Canoe Ltd owns 70% of the shares in Little Boat Ltd. Little Boat Ltd. received a dividend refund Manufacturing and processing profits deduction General rate reduction Note 6 Foreign non-business income tax credit Foreign business income tax credit Total Part 1 tax payable Note 4 Note 5 Note 7 for the total dividends paid. $6,000 for the total dividends paid. $159,896 $10,256 ($35,766) ($21,000) (58,350) ($18,252) ($4,500) ($4,150) $78,134 in calculating the Small Business Deduction the lesser of lines 400, 405, 410 or 427 of the T2 is $120,000. During 2017 White Water Canoe Ltd paid $162, 000 in dividends to its individual shareholders. The December 31, 2016 balance in the Refundable Dividend Tax On Hand account was $193,500. The dividend refund for the year ending December 31, 2016 was $47,300. For the calculation of Refundable Portion of Part 1 Tax: for Line Q on page 6 use $78,134 which is the Total Part I tax payable as listed above. Required: Using Schedule 3 and Page 6 & 7 of the T2 calculate the Dividend Refund for White Water Canoe Ltd. for 2017 #5) (12 Marks) White Water Canoe Ltd is a Canadian controlled private corporation with a year ending December 31, 2017. You have been asked to calculate the Part IV Tax, Refundable Dividend Tax On Hand (RDTOH) and Dividend Refund for White Water Canoe Ltd. The following information is provided to assist you in completing Schedule 3 and Page 6 & 7 of the T2 Return for White Water Canoe Ltd. Foreign business income Foreign non-business income Dividends from Big Boat Ltd (note 1) Dividends from Little Boat Ltd (note 2) Taxable capital gains Manufacturing and processing profits (note 3) Other Canadian active business income Canadian interest income Net Income Canadian dividends Charitable Donations. Net capital losses Non capital losses Taxable income $83,000 $18,000 $22,670 $21,600 $38,250 $184,230 $117,100 $78,150 $563,000 ($44,270) ($49,500) ($38,250) ($10,200) $420,780 #5) Continued Note 1 Note 2 Part 1 Tax: Base Amount White Water Canoe Lt owns 3% of the shares in Big Boat Ltd. Big Boat Ltd received a dividend refund of $8,000 Note 3 Manufacturing and processing profits were determined in compliance with regulation 5200. Most of the tax calculation have already been completed for you and you can assume that these calculations are correct. Additional refundable tax (ART) Federal tax abatement Small business deduction (note 4) White Water Canoe Ltd owns 70% of the shares in Little Boat Ltd. Little Boat Ltd. received a dividend refund Manufacturing and processing profits deduction General rate reduction Note 6 Foreign non-business income tax credit Foreign business income tax credit Total Part 1 tax payable Note 4 Note 5 Note 7 for the total dividends paid. $6,000 for the total dividends paid. $159,896 $10,256 ($35,766) ($21,000) (58,350) ($18,252) ($4,500) ($4,150) $78,134 in calculating the Small Business Deduction the lesser of lines 400, 405, 410 or 427 of the T2 is $120,000. During 2017 White Water Canoe Ltd paid $162, 000 in dividends to its individual shareholders. The December 31, 2016 balance in the Refundable Dividend Tax On Hand account was $193,500. The dividend refund for the year ending December 31, 2016 was $47,300. For the calculation of Refundable Portion of Part 1 Tax: for Line Q on page 6 use $78,134 which is the Total Part I tax payable as listed above. Required: Using Schedule 3 and Page 6 & 7 of the T2 calculate the Dividend Refund for White Water Canoe Ltd. for 2017

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