Question 1

5 Points

Briefly explain why an individual who receives dividends from a Canadian corporation must include 115% or 138% of the dividend received in income for tax purposes, while a corporation receiving the same dividend includes only the actual amount of the dividend.

Question 2

5 Points

Because income earned by a corporation is first subject to corporate tax and then taxed a second time when after-tax profits are distributed to individual shareholders, shareholders are entitled to claim a dividend tax credit. Does the dividend tax credit eliminate the double taxation of corporate profits? Explain.

Question 3

9 Points

Please describe the three forms of business ownership, the advantages, and disadvantages of each, and how they are taxed. Please keep your answers to about half a page for each business type.

1. Sole Proprietorship
2. Partnerships
3. Corporations

Question 4

14 Points

There are only seven legitimate ways that a shareholder can obtain funds from a corporation, what are they? Please provide a brief description of each and how they are taxed when it is received as payment to a person.