Mark Is the Only Shareholder of Sico Ltd

question 11

Multiple Choice

Mark is the only shareholder of Sico Ltd., a Canadian controlled private corporation.The CCPC has no balance in its GRIP account.In 2011, Sico paid a dividend in kind by distrib- uting securities with fair market value of $72,000 and an adjusted cost base of $56,000.Which of the following statements properly reflects the tax consequences of this transac- tion?

• A)Sico has Taxable Income of $8,000 and Mark has Taxable Income of $72,000.
• B)Sico has Taxable Income of $8,000 and Mark has Taxable Income $90,000.
• C)Sico has Taxable Income of nil and Mark has Taxable Income of $72,000.
• D)Sico has Taxable Income of $16,000 and Mark has Taxable Income of $90,000.
• Deemed Dividends

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Definitions:

S-cam Profiles

The shape and design of the cams used in a drum brake system which push the brake shoes apart and against the braking surface to stop the vehicle.

Closed-Anchor Brake Shoe

A brake shoe configuration where the ends are fixed in place, enhancing braking stability and force.

Anchor Pin

A pin used to secure or anchor components together, often found in brake assemblies to hold brake shoes in place.

S-cam Brake Systems

A type of drum brake system commonly used in heavy vehicles, where the rotation of an S-shaped camshaft forces brake shoes outward to create friction.