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Problem $15.$

Multi Enterprises Ltd$.$ is a Canadian$-$controlled private corporation whose fiscal period coincides with the calendar year. For the year $2023,$ the company's taxable income was calculated as follows:

Income from distributing net of CCA......................................................$$220,000$

Dividends from taxable corporations:

$($a$)$ connected corporation, dividend payment triggering a dividend refund

from its non$-$eligible RDTOH of $$2,750$ to the wholly owned subsidiary $11,000$

$($b$)$ non$-$connected corporation $($portfolio dividends$)($eligible$)............................20,000$

Taxable capital gain $($non$-$active$)...............$ $$29,000$

Allowable capital losses..................................... $12,00017,000$

Royalties $.............................................................................................9,000$

Recapture of CCA on disposal of sales equipment $.......................................4,000$

Income from rental of an apartment building $($no full$-$time employees and

tenants provide virtually all of their own services$).................................................14,000$

Interest charged on accounts receivable.................................................... $5,000$

Net income for tax purposes..................................................................$$300,000$

Less: net capital losses carried over.................................. $$7,000$

non$-$capital losses carried over. $....................................\mathrm{.}10,000$

donations...........................................................$\mathrm{.}26,000$

dividends from taxable Canadian corporations...........$\mathrm{.}31,00074,000$

Taxable income $.................................................................................$$$226,000$

At December $31,2022,$ there was a $$0$ balance in both the eligible and non$-$eligible refundable dividend tax on hand accounts. The company paid $$72,000$ in non$-$eligible dividends during $2023$ to individual shareholders.

The company is not associated with any corporation and has a permanent establishment in New Brunswick.

You have been asked to:

$($A$)$ Compute the federal Part I tax and assumed provincial tax at a $4\%$ rate on active business income eligible for the small business deduction and $12\%$ for all other income. Show in detail the calculation of all deductions in the computation, using a separate schedule for each special deduction. For purposes of the small business deduction, assume investment income earned in the prior year is the same as the amount earned in the current year. In calculating the small business deduction list all ineligible items of income, if any, and indicate the amount of the business limit available for the subsidiary.

$($B$)$ Compute the refundable dividend tax on hand balance as at December $31,2023,$ showing, in detail, your calculations and compute the dividend refund for $2023.$

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