Solution%20to%20Assignment%20Problem%20Ch13-1

Solution%20to%20Assignment%20Problem%20Ch13-1 - $ 8,000...

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Solution to Assignment Problem Thirteen - 1 The required calculations would be as follows: Corporate Taxes Income For The Year $50,000 Corporate Taxes (16%) ( 8,000) Income Available For Dividends $42,000 Personal Taxes On Dividends Dividend Income $42,000 Gross Up (25%) 10,500 Taxable Dividends $52,500 Tax Payable Before Dividend Tax Credit [(29% + 14%)($52,500)] $22,575 Dividend Tax Credit [(2/3 + 1/3)($10,500)] ( 10,500) Personal Tax Payable $12,075 Total Taxes On Corporate Flow Through Corporate Taxes
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Unformatted text preview: $ 8,000 Personal Taxes 12,075 Total Taxes $20,075 Total Taxes On Income Earned Directly Income For The Year $50,000 Combined Federal/Provincial Tax Rate (29% + 14%) 43% Personal Tax Payable $21,500 As the corporate tax rate is below the 20 percent rate that will provide perfect integration, integration does not work. The taxes on income flowed through a corporation are $1,425 ($21,500 - $20,075) less than would be assessed if the income were received directly....
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This note was uploaded on 01/31/2011 for the course MOS 4462 taught by Professor Ann during the Fall '10 term at UWO.

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Solution%20to%20Assignment%20Problem%20Ch13-1 - $ 8,000...

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