PRINCIPLES OF TAXATION F/BUS.+INVEST.
PRINCIPLES OF TAXATION F/BUS.+INVEST.
22nd Edition
ISBN: 9781259917097
Author: Jones
Publisher: MCG
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Chapter 11, Problem 2AP
To determine

Identify the corporations which forms an affiliated group eligible to file a consolidated tax return.

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Pearl Inc. is a Canadian-controlled private corporation​ (CCPC) that owns​ 100% of the voting shares of Oyster Ltd. and​ 25% of the voting shares of Shell Corp. The fair market value of the Shell Corp. shares owned by Pearl Inc. is equal to​ 25% of the fair market value of all Shell Corp. shares. In the current​ year, Pearl Inc. received the following​ dividends: Eligible dividends from various portfolio investments                                                                          ​$ ​ 7,500 ​Non-eligible dividends from Oyster Ltd.                                                                                            ​$30,200 Non-eligible dividends from Shell Corp.                                                                                             ​$12,750 As a result of paying the​ $30,200 dividend, Oyster Ltd. received a dividend refund of​ $7,550. Shell Corp. received no dividend refund for its dividend payment. Which of the following is the correct amount of Part…
P Corporation is the U.S.-based parent of F Company, a French-based branch. If P Corporation has U.S. taxable income of $100,000 and F Company has a $20,000 loss, what is P Corporation’s worldwide taxable income?
ABC co. is a Canadian controlled private corporation that acquired 100% of the shares of XYZ Co. in Year 1 for $50,000. New Co., an arm's length corporation, is now interested in purchasing ABC Co.'s investment in XYZ Co.'s shares are currently worth $400,000 and the retained earnings of the company are $100,000. To reduce the fair market value of the shares, XYZ Co. will pay a dividend of $350,000 to ABC Co. and ABC Co. will then sell the shares to New Co. for $50,000 XYZ Co.'s RDTOH balances are nil. Applying the anti-avoidance rules of Subsection 55(2), what is the tax effect of the $350,000 dividend?

Chapter 11 Solutions

PRINCIPLES OF TAXATION F/BUS.+INVEST.

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