An investor is in a 29% marginal tax bracket, and receives $200 in dividends from a Canadian corporation. How much tax must they pay on the dividend? (Assume a 38% gross-up, the dividend tax credit is 25% and the foreign withholding tax is 15%). a) $80.04b) S11.04c) $0 d) None of the other answers is correct.
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- You are Canadian resident and earned $10,000 of dividend income from a Canadian controlled company. For the year, your marginal federal tax rate was 22%. The dividend gross-up percentage was 38% and dividend tax credit was 15%. How much federal income taxes will you pay for your dividend income (nearest penny ($0.01) without dollar sign ($) or comma, e.g. 512.60)?Assume that the personal tax rate on interest income is 15% and the personal tax rate on dividends is 10%. Assume also that the Company generates EBIT equal to 5 euros and distributes 40% of these earnings (payout ratio = 40%) to its shareholders. What is the net income that the shareholder receives after taxes? Coporate tax =22% a) 3.51 b) 1.40 c) 1.78 d) None of the above.Which of the following is (are) true about the dividend tax imputation system in New Zealand? Choose all correct answer(s). The dividend tax imputation system is very similar to that used in the U.Ss. O Dividends are essentially still taxed at the company's tax rate (28%). If we account for personal taxes, the tax advantage of debt relative to equity for New Zealand companies increases; this is why New Zealand companies prefer debt to equity as a source for long-term financing. If the dividend is fully imputed, the effective tax rate on dividend for individual shareholders in New Zealand are their personal marginal tax rates. If the shareholder received $1,000 imputation credit, but he needs to pay $5,000 tax on income other than dividend income, he/she only needs to pay $4,000 to the IRD.
- a) Explain, in three sentences or less, ‘cross-credit’ in relation to the foreign tax credit. Make sure to identify the problem, and how cross-crediting solves the problem. b) Treadwell, Inc. had $2,500,000 taxable income, $250,000 of which was generated by business activities in foreign jurisdictions. If Treadwell paid $55,500 foreign tax to Utopia. Compute the following: US tax paid______________________ Worldwide tax paid_______________D6) If the corporate tax rate in a foreign country is 20%and the tax rate in the home country is 30%, when calculating NPV a.you must account for paying the additional 10% in corporate taxes. b.you do NOT adjust NPV for taxes c.you should account for paying an additional 30% in corporate taxes. d.you should increase the NPV of the project by 10%.What is the relative tax advantage of corporate debt if the corporate tax rate is Tc=0.35, the personal tax rate is Tp=0.35, but all equity income is received as capital gains and escapes tax entirely ( T pE =0)? How does the relative tax advantage change if the company decides to pay out all equity income as cash dividends that are taxed at 15%?
- Using the same data in the previous question, what is the income tax due if Sandbox is a resident foreign corporation? P50,000 P40,000 P87,500 P70,000Analyst A states that for many small fırm's US federal income tax is paid on net income from operations. Analyst B states that for many small firm's US federal income tax is paid on annual net cashflow. Who is correct? B is correct A is correct neither is correct both are correctBased on the information provided, answer the following questions: A. A firm has a taxable income of $16.2 million, its marginal tax rate is? B. A firm has a taxable income of $16.2 million, its average tax rate is?
- For the following independent cases, determine whether economic income is present and, if so, whether it must be included in gross income (i.e., is it realized and recognized for tax purposes?). Note: Leave no answers blank. Enter zero if applicable. Required: Asia owns stock that is listed on the New York Stock Exchange, and this year the stock increased in value by $15,250. Ben sold stock for $10,500 and paid a sales commission of $210. Ben purchased the stock several years ago for $4,200. Bessie is a partner in SULU Enterprises LLC. This year SULU reported that Bessie's share of rental income was $2,850 and her share of municipal interest was $800.Example: Marginal Vs. Average Rates Suppose your firm earns $4 million in taxable income. What is the firm's tax liability? ● ● What is the average tax rate? What is the marginal tax rate? 50,000*0.15 25,000*0.25 25000*0.34 235000*0.39 (4,000,000-335,000) *0.34 Total tax liability Average tax rate Marginal tax rate 7,500 6,250 8,500 91,650 1,246,100 1,360,000 If f you are considering a project that will increase the firm's taxable income by $1 million, what tax rate should you use in your analysis? Is it marginal or average tax rate that is normally relevant for financial decision making? 34% 34%Which of the following is true concerning dividends? a. Foreign dividends are included in income at their pre-withholding-tax amounts for tax purposes. b. Dividends received from a CCPC's business income that is not subject to the small business deduction are typically grossed-up to include 115% of the dividend. c. Dividends received a CCPC's business income that is subject to the small business deduction are typically grossed-up to include 138% of the dividend. d. Eligible dividends require a 115% gross up.