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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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