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James held 2% of the outstanding shares of a Canadian public corporation. The corporation issued an eligible stock dividend in 2016 and capitalized...

James held 2% of the outstanding shares of a Canadian public corporation. The corporation issued an eligible stock dividend in 2016 and capitalized $800,000 of its retained earnings. By how much will James' Taxable Income increase as a result of the dividend?

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The taxable income will... View the full answer

4 comments
  • unfortunately this is a wrong answer
    • khushprm
    • Aug 07, 2018 at 12:51pm
  • The dividend is distributed on the basis of share ownership and it should be 2% of the value capitalized at $800,000 to give $16,000.This should definitely be correct.
    • Lennah
    • Aug 07, 2018 at 12:53pm
  • but this is for 2016 and the rules for 2016 needs to be applied
    • khushprm
    • Aug 07, 2018 at 1:17pm
  • this is just the amount of percentage acquired
    • khushprm
    • Aug 07, 2018 at 1:19pm

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