Cacc 842 Module Xii Assignement

Problem 2

(A) Leah Ltd is associated with itself.

(B) Abigail Ltd and Ethan Ltd meet the requirements set by Par 256(1) (c) and thus are associated. Ms Miriam controls both entities, she is related to herself, and she owns more than 25% of the shares of both companies.

(C) Clare Ltd and Philip Ltd are not associated since their owners are not related, although they are partners in 2 different companies

(D) Jay Ltd and Alex Ltd are not associated for the same reasons as above

(E) Without sufficient information regarding the owners of the companies, it is not possible to determine whether or not they are related.

(F) Rick Ltd and Daniel Ltd are related, Par 256(1)(c), since Ms Ruth is owner of Rick and also owns 25 % of Daniel, she is related to her daughter who owns 75% of Daniel.

(G) Although the owners of Gord Ltd and Rosalyn Ltd are related, the companies are not associated, since neither owns shares in the other company. Likewise, Neither company is related to Rebecca Ltd, although they own 30% of the shares, they are not related to the other shareholders.

(H) Benjamin Ltd and Livi Ltd are associated, since the Mrs Yael owns the majority of the shares of Benjamin and thus owns indirectly (through Benjamin’s shares) and directly 55% of Livi.

(I) Ms Daniella owns 60% of Elizabeth Ltd and 25% of the shares of Ava Ltd but holds an option to buy all the shares, she is deemed owner of those shares by Par 256 (1.4) and thus Elizabeth and Ava are associated.

(J) Ethan and Maya are associated, since each member of either companies is related to the owner of the other company, and Mr Jonathan owns 25% of the shares of Maya. Par 256(1)(e).

Problem 5

Taxable income 316, 000

Federal Tax after Provincial abatement 28% (88,480)

Net Federal tax 227,520

Small business deduction (51,850)

Net Federal Tax 175,670

17% x the least of: 305, 000

Active business income...