[mduford]

Does anyone know what this field is supposed to represent? I just upgraded to 2007.1.0 and it came up on the info page today.

There is also a field for taxable capital for the associated group.

Thanks

Michelle

[RL Tax Joe]

mduford, on Dec 10 2007, 09:53 PM, said:

Does anyone know what this field is supposed to represent? I just upgraded to 2007.1.0 and it came up on the info page today.

There is also a field for taxable capital for the associated group.

Thanks

Michelle

It has to do with a small business deduction grind

[mduford]

Thanks for the response, however, I was looking for something a little more specific.

I did some reaseach and there is some complex rules about what Taxable Capital Employed in Canada is.

http://www.canlii.or...3/sec181.2.html -see this link for a detailed description

It appears to consist of share capital, retained earnings and contributed surplus and some other things. There are special rules around financial institutions and does not seem generally appear to be an issue for the smaller companies. However, after reading this, I am not sure of what to put in this field.



Thanks

[BalancedBooks]

RL Tax Joe, on Dec 11 2007, 03:18 PM, said:

It has to do with a small business deduction grind

LOL...Here we go again.

[unknown]

Courtesy of Intra:

What’s New
The Federal Budget of May 2, 2006 confirmed the November 2005 Economic Statement, which proposed that Part I.3 Tax, will be eliminated effective January 1, 2006 subject to proration for non-calendar taxation years.
Every corporate taxpayer with Taxable Capital employed in Canada was subject to a separate tax on that capital, under Part I.3 of the Act governed by S. 181 to 181.71.
In order to calculate the tax under this Part, a financial institution must complete form S34, an insurance corporation must complete form S35, and all other taxpayers must complete form S33.
Certain corporations were exempt from tax under this Part. They include
• a non-resident owned investment corporations (as defined in S. 133(8)),

• a corporation that was a bankrupt, a corporation exempt from tax under Part I,

• a non-resident corporation without a business with a permanent establishment in Canada,

• a deposit insurance corporation (as defined in S. 137.1(5)), and

• a co-operative corporation (as defined in S. 136).

Tax Rate [S. 181.1(2)]
Under existing legislation, the rate of tax applied to the taxpayer’s Taxable Capital employed in Canada, in excess of the Capital Deduction (discussed below), was a prorated rate based on the number of days in the taxation year in each calendar year based on the following rates:
• 0.2250% for 2003 and prior years;

• 0.2000% for 2004;

• 0.1750% for 2005;

• 0.1250% for 2006;

• 0.0625% for 2007; and

• 0% for 2008 and later years.

[mduford]

Thanks Bert.

Profile apparently picks this information up from S33. In my clients case, the r/e was actually a deficit causing this field to be 0. This in turn caused Profile to give me an error. Had my client been profitable, I may not even have noticed this field.

This way at least I was able to do some research and I learned something today! Always a good day when that happens.

Take care.
Michelle

[RL Tax Joe]

mduford, on Dec 11 2007, 02:25 PM, said:

Thanks for the response, however, I was looking for something a little more specific.

I did some reaseach and there is some complex rules about what Taxable Capital Employed in Canada is.

http://www.canlii.or...3/sec181.2.html -see this link for a detailed description

It appears to consist of share capital, retained earnings and contributed surplus and some other things. There are special rules around financial institutions and does not seem generally appear to be an issue for the smaller companies. However, after reading this, I am not sure of what to put in this field.
Thanks

That was pretty specific. If you do more research..perhaps about a small business deduction grind..you will see what I was referring to. :unsure:

[RL Tax Joe]

Bert_Mulder_CGA, on Dec 11 2007, 02:40 PM, said:

Courtesy of Intra:

What’s New
The Federal Budget of May 2, 2006 confirmed the November 2005 Economic Statement,

Thats a super Tee Hee!

[unknown]

RL Tax Joe, on Dec 11 2007, 02:47 PM, said:

Thats a super Tee Hee!

lol, had n't noticed that.

Courtesy CCH:

181.2.

French Version

(1) Taxable capital employed in Canada

The taxable capital employed in Canada of a corporation for a taxation year (other than a financial institution or a corporation that was throughout the year not resident in Canada) is the prescribed proportion of the corporation's taxable capital for the year.

Former Act

Related MatterRelated Sections: S. 181(1), “financial institution”.

Regulation: 8601.

Interpretation Bulletin: Primary — IT-532 Part I.3 — Tax on Large Corporations.

Tax Window Files: Taxable Capital Employed in Canada, Technical Interpretation, Financial Industries Division, February 12, 2001, CRA Document No. 2000-0058187.

Taxable Capital Employed in Canada, Technical Interpretation, Financial Industries Division, July 26, 1995, CRA Document No. 9516225.

Deferred Revenue and Deferred Charges, Round Table, Tax Executives Round Table, May 16, 1994, CRA Document No. 9410460.

Customer Contributions, Memorandum, Financial Industries Division, September 10, 1992, CRA Document No. 9217247.

Claim for Medical Expenses Where Individual Becomes Bankrupt, Memorandum, Business and Publications Division, July 6, 1999, CRA Document No. 9912477.




Canadian Tax Reporter

French Version



--------------------------------------------------------------------------------
©2007 CCH Canadian Limited. All rights reserved. Terms of use.

[RL Tax Joe]

If you actually look at the red warning. It specifically states that it uses those cells to determine the small business deduction limits.

[jjinlotusland]

RL Tax Joe, on Dec 12 2007, 12:17 AM, said:

If you actually look at the red warning. It specifically states that it uses those cells to determine the small business deduction limits.

The problem here is that the error message is showing up on T2s of corporations with taxable capital that is less than $10 Million. Since Part 1.3 only applies on taxable capital in excess of $10M and Line 415 only grinds the SBD if taxable capital exceeds $10M, there is no apparent reason for this warning to appear. This has only started showing up in the 2007 version.

[tribedude]

jjinlotusland, on Dec 14 2007, 03:30 PM, said:

The problem here is that the error message is showing up on T2s of corporations with taxable capital that is less than $10 Million. Since Part 1.3 only applies on taxable capital in excess of $10M and Line 415 only grinds the SBD if taxable capital exceeds $10M, there is no apparent reason for this warning to appear. This has only started showing up in the 2007 version.

Is there a workaround so that the filed does not generate an error message and stop the online filing of the T2?

[unknown]

the answer, my friend, is found right here:

http://laws.justice....-3.3/index.html

[tribedude]

Bert_Mulder_CGA, on Apr 13 2009, 08:04 PM, said:

the answer, my friend, is found right here:

http://laws.justice....-3.3/index.html

ya, that's really helpful.

[PeteP]

tribedude, on Apr 13 2009, 10:02 PM, said:

ya, that's really helpful.

Bert's answer was not quite complete - the rest of it is in the Regs