| | | June 2019 | Grinding through the small business limit
Sarah Netley, Macc, Mtax, CPA, CA TEP, is a tax manager at Baker Tilly KDN LLP | | In 2018, amendments to the Income Tax Act were enacted to limit the $500,000 federal small business limit where a Canadian Controlled Private Corporation (CCPC) earns investment income. For every $1 of Adjusted Aggregate Investment Income (AAII) that a CCPC earns in excess of $50,000, its small business limit will be reduced by $5. The full small business limit, where the CCPC earns $150,000 or more of AAII, will be eliminated. AAII effectively includes any investment income that is not incidental or does not pertain to an active asset. Note that in Saskatchewan, the grind will reduce the provincial small business limit by $6 for every $1 of AAII because of the province’s higher provincial small business limit ($600,000). |
| | | Baker Tilly Ottawa LLP 400-301 Moodie Drive
Ottawa, ON
K2H 9C4 Canada
info@bakertilly.ca
www.bakertilly.ca |
| This email is sent by Baker Tilly Ottawa LLP, formerly Collins Barrow Ottawa LLP, 400-301 Moodie Drive, Ottawa, ON, Canada K2H 9C4.
Baker Tilly Canada periodically publishes Tax Alert for its clients and associates. It is designed to highlight and summarize the continually changing tax and business scene across Canada. While Tax Alert may suggest general planning ideas, we recommend professional advice always be sought before taking specific planning steps. |
|
|
|
