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Question:

Venus Williams Inc. (VWI) is a Canadian controlled private corporation (CCPC) with a December 31 year end. For the taxation year ending December 31, 2020, its Net income for Tax Purposes was made up of the following components:

ACTIVE BUSINESS INCOME	$ 602 200
DIVIDENDS FROM CANADIAN CORPORATIONS :
Serena Inc. (Subsidiary 75%) (Note 1)	255 000
Portfolio Investment (eligible dividends)	100 000
INTEREST	64 300
TAXABLE CAPITAL GAINS	132 600
NET INCOME FOR TAX PURPOSES	$ 1 154 100

Note 1 As a result of paying these dividends, Serena Inc. received a dividend refund of $ 78 000.

Additional information:

1. VWI is allowed an ABL of $ 100 000 because the Corporation shares the ABL with other associated companies.

2. At December 31, 2019, VWI had a RDTOH balance of $ 18 000. No dividends were paid in 2019 by VWI.

3. On July 1, 2020, VWI paid taxable dividends to its shareholders in the amount of $ 148 700. Of this total, $ 42 600 were designated as eligible.

4. VWI has a net capital loss carry forward available of $ 35 000 and a non-capital loss carry forward of $ 163 400. It plans to deduct the maximum of both of these items during 2020.

Required: Calculate the following items for VWI:

A) Federal Part I Tax Payable

B) Part IV Tax Payable

C) The balance in the RDTOH account on December 31, 2020

D) The Dividend Refund

E) Total Federal Tax Payable

N.B.: When performing your calculation, assume that the small business deduction rate prevailing in 2020 is 19%.

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