You have been provided with the following information for Anjum LLP (Anjum), a CCPC, for its December
Question:
You have been provided with the following information for Anjum LLP (Anjum), a CCPC, for its December 31, 2021 year end:
Net income for tax purposes $548,600
- Eligible dividends received from investments in marketable securities $4,900
- Non-eligible dividends received on investment in 25% of the shares of another CCPC $8,600
- Dividends received from foreign investments (arm's length) $3,500
- Capital gain on sale of land and building used in the business $73,700
- Allowable capital loss on sale of marketable securities $2,750
- Rental income (net of CCA) on warehouse rented out to neighbouring business $9,640
- Foreign business income (net of foreign tax paid of $15,400) $76,360
- Non-capital loss claimed in the year $22,500
- Net capital loss claimed in the year $1,240
Required:
Determine the following for Anjum for its December 31, 2021 year-end:
a) Taxable income b) Property income and taxable capital gains included in net income
c) Aggregate investment income (AII) d) Net Canadian active business income
2. Reza Hassan owns and/or is involved in a number of businesses. Reza knows that federal tax rates have changed in the last few years, and he wishes to gain an understanding of the federal tax rates that his various corporations are paying.
You have talked to Reza and have received the following information regarding his current holdings:
- Reza owns 100% of the common shares of Management Inc., which provides management services to Flexcon Ltd. Flexcon, which manufactures plastics, is an unrelated company and is Reza's former employer. Reza is the only employee of Management Inc.
- Reza also owns 100% of Rent-All Inc. Rent-All has no employees other than Reza. It earns rental income from real property from unrelated third parties.
- Each of the corporations mentioned above is a Canadian-controlled private corporation (CCPC) with a December 31 year end.
- None of the corporations described above earned more than $500,000 of active business income for 2021.
The above applies to each corporation's 2021 taxation year.
The following diagram shows the ownership of the corporations and the flows of income:
Expert Answer:
1 a Taxable income Net income for tax purposes 548600 Noncapital loss claimed 22500 Net capital loss claimed 1240 Taxable income Net income for tax pu... View the full answer
