3 refundable tax art is 6 23 percent of the lesser of

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ITA 123.3 refundable tax (ART) is 6-2/3 percent of the lesser of: 1. Aggregate Investment Income $56,000.00 2. Taxable Income $41,000.00 Deduct: Amount Eligible For The SBD -31000 $10,000.00 ITA 123.3 tax on aggregate investment income is (6-2/3%)($10,000) = $667. Note Four – The manufacturing and processing profits deduction is nil. It is equal to 10 percen 1. Canadian M & P Profits $150,000.00 Deduct: Amount Eligible For The SBD -31000 $119,000.00 2. Taxable Income $41,000.00 Deduct: Amount Eligible For The SBD -31000 Aggregate Investment Income (Note Three) -56000 Nil
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Sheet1 Page 4 Therefore, M & P deduction would be nil. Note Five Taxable Income $41,000.00 Amount Eligible For The SBD -31000 Aggregate Investment Income (Note Two) -56000 Full Rate Taxable Income Nil Part D – Dividend Refund Aggregate Investment Income (Note Three) $56,000.00 Rate 26-2/3% $14,993.00 Deduct Excess Of: Foreign Non-Business Tax Credit $3,000.00 Over 9-1/3% Of Foreign Non-Business Income (9-1/3%)($20,000) -1867 -1133 Amount Under ITA 129(3)(a)(i) $13,800.00 Taxable Income $41,000.00 Deduct: Amount Eligible For The Small Business Deduction -31000 (25/9)($3,000) Foreign Non-Business Tax Credit -8333 Total $1,667.00 Rate 26-2/3% Amount Under ITA 129(3)(a)(ii) $445.00 Amount Under ITA 129(3)(a)(iii) Part I Tax Payable $3,877.00 The refundable amount for Part I tax is $445, which is determined under 129(3)(a)(ii). RDTOH Balance – End Of The Preceding Year $17,000.00 Dividend Refund For The Preceding Year -2000 $15,000.00 Refundable Portion Of Part I Tax $445.00 Part IV (Part B) 3667 4112 RDTOH Balance – December 31, 2010 $19,112.00 The dividend refund for the year would be $19,112, the lesser of: - One-third of taxable dividends paid ($210,000)(1/3) = $70,000 - RDTOH Balance - December 31, 2010 = $19,112 Part E – GRIP Balance GRIP Balance At End Of 2009 $13,400.00 Taxable Income $41,000.00
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Sheet1 Page 5 Income Eligible For SBD -31000 Aggregate Investment Income -56000 Adjusted Taxable Income $Nil Rate 69.00% Nil Eligible Dividends Received 11000 Eligible Dividends Designated in 2009 -6000 GRIP Balance At End Of 2009 $18,400.00 Part F – Foreign Tax Credit Foreign non-business income tax credit would be the lesser of: - Foreign Non-Business Tax Paid $3,000.00 - An Amount Calculated As Follows: Foreign Non-Business Income (Part I Tax Otherwise Payable Excluding The ART) Adjusted Net Income ($20,000/$276,000 - $11,000 - $19,000)($15,580 - $4,100) = $933 The lesser would be $933. Small business deduction is 17 percent of the least of the following: 1. Active Business Income $190,000.00 2. Taxable Income $41,000.00 Deduct: (10/3)($993) Foreign Non-Business Tax Credit -3110 $37,890.00 3. Annual Business Limit $500,000.00 The lesser would be $950, and would be the actual foreign non-business tax credit.
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