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Tax- Coporate Tax
Tax- Coporate Tax
18
Accounting
Post-Graduate
07/16/2014

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Cards

Term
Shareholder advancee
Definition
deemed taxable benefit if loan amount included in shareholder income year the loan was made. However this would not apply if the entire loan is repaid witin 1 year of end of taxation year
Non taxable if shareholder is an EMPLOYEE and loan for :
- purposes of acquiring a dwelling
- to acquire a motor vehicle used in employement
- loan made to acquire shares in lending or related corporation.
-all of the above must have reasonable repayment terms
-imputed interest benefit will arise depending on the rate charged in any
Term
Related party advance
Definition
considered taxable benefit
Term
managment salaries
Definition
to deduct mgmt salaries, they must be ordinary and necessary, reasonable amount, based on services rendered, and appropriatley incurred in the year
Term
managment fees to be deductible must be:
Definition
- incurred for purposes of producing income
-reaosnable
-should be provided and fee paid out
-have a written contract
Term
bonues
Definition
-if paid wihtin 180 days of year end can be deducted by employer when declared and does not have to be included in employement income until received
Term
common business expenses deductible
Definition
-business auto expenses
-home office
-convention expenses (2 per year)
-forign taxes
Term
Filing deadlines
Definition
- April 30
- For an individual or partner who has a sole propritorship due June 15 but amounts owing still due on April 30
Term
T4 sent to employees
Definition
must be sent by last day of Feruary of following taxation year.
Term
LifeTime Capital Gains exepmtion
Definition
Eligble to use 800k if dispose of Qualifying Small Business Corp shares:
- SBC-CCPC with 90% of FV assets used in active CND business
-Held shares for 24 months preceeding disposition
-For last 24 months, at least 50% of the FV assets used in active CND business
Term
Small business deduction
Definition
-available to corps that are CCPCs throughout the year
-reduced it taxable capital employed in CND exceeds 10M
-Available on active business income up to 500k
-ABI must be shared among associated corporations
Term
Non Capital Loss
Definition
-carry back 3 years and used against any type of income
-carry forward 20 years
-most taxpayers will first carry back losses to the extent possible considering that there is a refund available right away.
Term
Net Capital Loss
Definition
- carry back 3 years
- carry forward indefintely
-can only be applied against capital gains
Term
DIVIDENDS VS SALARY pay out of a corporation
Definition
want to compate the after tax cash kept by the taxpayer
Term
Paid through dividend steps
Definition
-business income = taxable income
-part 1 tax payable = taxable income *corp rate
=amount avialable for dividends (taxable income -taxes payable)

Non eligble dividends reveieved (amount available for dividend)
-gross up by 25%
=taxable dividends
-multiple by tax rate
=tax before tax credit
-less dividend tax credit (=gross up amount * rate (6/11)
=individual taxes
dividends received -individual taxes = after tax cash kept by tax payer
Term
Paid through salary
Definition
business income = salary income
salary income * individual tax = tax paid
Salary income - tax paid = after tax cash kept
Term
eligible dividends
Definition
-gross up by 38% --> pay second
Term
non eligable dividneds
Definition
-gross up by 25%, marginal rate highest after dividend tax credit
-pay first
-normal dividends received from regular CCPC's
Term
Replacement Property Tax deferral Provisions (section 44)
Definition
- use provision to eliminate or reduce capital gains arising from qualigying disposistion based on replacment property within a specified time period
-taxpayer must maek election
- defer income inclusions until replacment property assest are sold or used
- voluntary dipsosition : only applies to former business relocation and replacment must occur within 12 months after year in which dipsols took place.
Involuntary disposition: replacment must occur wihtin 24 months after year when disposition occured and disposal is considered when isurance receipt is received.
- apply the recapture gain and capital gain agisnt the new UCC to defer the gains
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