Course Hero Logo

Answer after tax retention with the use of a

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 20 - 22 out of 55 pages.

20
Answer:After tax retention with the use of a corporation would be $79,454 ($143,200-$63,746). This is $1,683 less t$81,137 that would be retained through direct receipt of this income.You should advise your client that using a corporation would result in an overall tax cost, making it not adto transfer her assets to a corporation.76)Maximilian Maximus has employment income in excess of $300,000. This means that any additional income willat a combined federal/provincial rate of 51 percent.For the year ending December 31, 2020, in addition to his employment income, Max has the following amounts oinvestment income:Interest Income$ 71,000Non-Eligible Dividends-Portfolio Investments102,000Non-Eligible Dividends From A 100 Percent Owned CCPC(The CCPC Receives A Dividend Refund Of $23,000)96,000Because of his extensive use of recreational drugs, Max requires all of the income that is produced by these invest(and then some).In his province of residence:• the corporate tax rate is 2.5 percent on income eligible for the small business deduction• the corporate tax rate is 12 percent on other income• the dividend tax credit is 4/13 percent of the dividend gross up for non-eligible dividendsMax has asked your advice as to whether there would be any tax benefits associated with transferring his investma corporation. Provide the requested advice, including an explanation of your conclusions.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 55 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
N/A

Newly uploaded documents

Show More

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture