Alpha Ltd. is a Canadian Controlled Private Corporation. During 2020, it has a net income for tax purposes of $480,000, including $80,000 of adjusted aggregate investment income, and the remaining is active business income. Its taxable capital employed in Canada for 2020 is $8 million.

Alpha also has a non-capital loss carried forward from previous years of $100,000.

Alpha has an associated company, Beta Inc. They share the annual business limit equally. Beta Inc. has no adjusted aggregate investment income in 2019 or 2020.

In 2019, Alpha has an adjusted aggregate investment income of $120,000, and a taxable capital employed in Canada of $12 million.

Required: Calculate the small business deduction for Alpha for 2020.

Answer rating: 100% (QA)

Calculate the small business deduction for Alpha Dedu... View the full answer