Question

***Simple Calculation of Federal Part 1 Tax Payable: ABC, a CCPC, has taxable income of $200,000. - ABC's active income is $50,000. - None of the income relates to manufacturing or processing or is considered aggregate investment income. - All the income was warned in Canada. - ABC is not associated with any other corporations. Calculate ABC's federal Part 1 tax payable

Answer 1

To calculate ABC's federal Part 1 tax payable, we need to use the small business tax rate for active income. With a taxable income of $200,000 and active income of $50,000, ABC's federal Part 1 tax payable can be calculated using the applicable tax rates.

Step-by-step explanation:

Taxable Income and Active Income:

ABC's taxable income is $200,000, and its active income is $50,000. The distinction between taxable income and active income is important for applying the appropriate tax rates.

No Manufacturing or Processing, No Aggregate Investment Income:

Since none of the income relates to manufacturing or processing, and there is no aggregate investment income, we can focus on the small business tax rate applicable to active income.

Income Earned in Canada:

Given that all the income was earned in Canada, ABC's tax calculation is based on Canadian tax regulations.

Not Associated with Other Corporations:

ABC's status of not being associated with any other corporations influences the tax calculation, as associated corporations may share certain tax attributes.