RSM424H1 Final: RSM424 Tutorial 4
Document Summary
Diagram the organizational structure of crum"s financial activities. Association is relevant since associated corporations will share the ,000 annual business limit taxed at low corporate tax rate = 13% Describe the type of income each entity earns and explain the related tax treatment. Types of income: abi, sbi income from passive sources (e. g. rents, interest, royalties, dividends, cg, psbi (professional service business income) For abi: first k taxed @ low corporate tax rate = 13, excess of k taxed @ high corporate tax rate = 27% Pecky"s restaurant ltd: coffee shop income is abi, pecky"s and crum restaurants are associated so they must share the k sbd limit. Total income of pecky"s and crum = (k + 35k + 80k) + 440k = k: first k taxed @ low corporate tax rate = 13, excess of k taxed @ high corporate tax rate = 27% Total income of pecky"s, crum and real co. = (k + 50k) = k.
