For Integration to Work Properly for a CCPC Whose Income

question 105

True/False

For integration to work properly for a CCPC whose income qualifies for the small business deduction, the combined federal/provincial tax rate on corporations must be equal to 20 percent, while the combined federal/provincial dividend tax credit must be equal to two-thirds of the gross up.

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Definitions:

Opportunity Cost

The expense incurred from bypassing the next most favorable choice when a decision is made.

Tax Rate

The percentage at which an individual or corporation is taxed by the government.

Market Value

The current price at which an asset or service can be bought or sold in an open market.

Opportunity Cost

What a business, investor, or individual forgoes in benefits when they decide on one choice over a different one.