Saxon Company is a CCPC that began operations on January 1, 2019. It has adopted a December 31 year end. During 2019, the Company received eligible dividends of $45,000 and designated $40,000 of the dividends it paid as eligible. On December 31, 2019, the balance in the Company's GRIP account was $45,000. For 2020, Saxon has Taxable Income of $726,000. Included in this amount is $18,000 of interest income, taxable capital gains of $22,000, and the deduction of a net capital loss of $18,000. Also during that year, the Company received eligible dividends of $36,000. In determining the 2020 Tax Payable, the Company has a small business deduction of $66,500. During 2020, Saxon pays dividends of $48,000, with $21,000 of this amount being designated as eligible. Required: Determine the Company's GRIP balance at the end of 2020.

Saxon Company is a CCPC that began operations on January 1, 2019. It has adopted a December 31 year end. During 2019, the Company received eligible dividends of $45,000 and designated $40,000 of the dividends it paid as eligible. On December 31, 2019, the balance in the Company's GRIP account was $45,000. For 2020, Saxon has Taxable Income of $726,000. Included in this amount is $18,000 of interest income, taxable capital gains of $22,000, and the deduction of a net capital loss of $18,000. Also during that year, the Company received eligible dividends of $36,000. In determining the 2020 Tax Payable, the Company has a small business deduction of $66,500. During 2020, Saxon pays dividends of $48,000, with $21,000 of this amount being designated as eligible. Required: Determine the Company's GRIP balance at the end of 2020.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 48P

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