Maximizing The Small Business Deduction: Preventing Corporations from Being Associated
Barrett Tax Law
The Small Business Deduction. The government giveth a wondrous gift, but if you're not careful, they taketh back.
Income Tax Act
What is the Ontario Small-Business Deduction?
Different Ways Companies are Considered to be Associated
- Direct / Indirect Control of a Corporation: one corporation controls the other
- Common Control of Multiple Corporations: both corporations controlled by the same person / group of people
- Control by Corporations by Related Parties (aka the 25% Rule): related individuals or groups of individuals each control a corporation, and one relative / group owns at least 25% percent of a non-specified class of shares of the other corporation.
Conclusion
Income Tax Act
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