LMN Corp. is a publicly traded Canadian corporation located in Manitoba. During the year, it earned...
LMN Corp. is a publicly traded Canadian corporation located in Manitoba. During the year, it earned net income for tax purposes of $750,000 after all adjustments. During the preceding year, the company incurred a non-capital loss of $65,000. What is the minimum amount of federal Part I corporate tax the company will have to pay this year?
a) $77,750
b) $102,750
c) $112,500
d) $191,800
Homework Answers
Calculation of Minimum amount of Federal Part I corporate tax the company have to pay
LMN Corporation can reduce its taxable income by deducting any non capital loss for last 7 years reported in returns.
Current Year Taxable Income $750,000
Less : Previous Year Non-Capital Loss ($65,000)
Taxable Income after set off $685,000
Since LMN Corporation is located in Manitoba which has the federal tax rate of 15%. Therefore, the amount of tax to be paid by the corporation this year will be -
= $685,000 * 15%
= $ 102,750
Hence, Option B is correct.
Remaining options are incorrect.
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