UIL has a 60% owned subsidiary UXL. In 2019 UXL was allocated $375,000 of the annual business limit and paid a dividend that produced a $50,000 Part IV refund.

In 2019 UIL paid a dividend of $54,780 and received a $21,000 Part IV refund and had a remaining RDTOH balance of $30,000. During 2020 the results from operations are as follows:

Active business income                        $       250,000

Interest income                                       $         10,000

Dividends                                                $         30,000

Capital gains                                           $         40,000

Required:

Calculate:

• Part I Tax
• Part IV Tax
• Refundable Dividend Tax on Hand RDTOH Balance

Dividend required to empty the Refundable Dividend Tax on Hand (RDTOH) pool

Answer rating: 100% (QA)

1 Part I Tax The basic rate of Part I tax is 38 of ... View the full answer