Your client, Fredrickson Ltd., is in its first year of operations, and has asked your advice on certain tax matters. Fredrickson is a Canadian controlled private corporation earning income from investments, and is 100% owned by Tammy Yin. Fredrickson owns 100% of the voting shares of Gestures Ltd. As a result of paying the below dividend, Gestures received a dividend refund in the amount of $10,000. Fredrickson earned the following amounts of income for the year ending December 31, 2020:

• Interest Income                                                                                    $42,000

• Dividends from investments in various publicly traded companies      $45,000

• Dividend from Gestures Ltd.                                                                $30,000

Fredrickson paid Non-Eligible dividends to Tammy in the amount of $110,000 during 2020.

Fredrickson is subject to a combined Federal tax rate on investment income of 50 2/3% (includes the refundable portion of part 1 tax and the ART).

Required:

For the taxation year ending December 31, 2020, calculate the following items for Fredrickson:

1. Part I Tax Payable.

2. Part IV Tax Payable.

3. The balance in the Non-Eligible RDTOH on December 31, 2020.

4. The dividend refund on the Non-Eligible dividends paid to Tammy.

Answer rating: 100% (QA)

Part 1 tax payable Investment Income x Part 1 tax rate 42000 45000 30000 x 50 23 117000 x 5... View the full answer