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Homework answers / question archive / FMGT 4410Chapter 13: Taxation of Corporate Investment IncomeExampleNorgrave Ltd
FMGT 4410Chapter 13: Taxation of Corporate Investment IncomeExampleNorgrave Ltd., a CCPC, had no GRIP balance at the end of 2016. During 2017, the Company received eligible dividends of $106,600 and designated $25,000 of its dividends paid as eligible. At the end of 2017, Norgrave has a GRIP of $106,600.For 2018, Norgrave has Taxable Income of $225,000. This amount includes aggregate investment income of $55,000. In addition, the Company receives eligible dividends during the year of $50,000.In determining 2018 Tax Payable, the Company has a small business deduction of $27,000 (18% x $150,000). During 2018, Norgrave pays dividends of $40,000, with $20,000 of this amount being designated as eligible. Calculate the 2018 ending balance in GRIP for Norgrave.
