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During the Year Ending December 31, 2020, the Renaud Family

Question 87

Essay

During the year ending December 31, 2020, the Renaud family trust received eligible dividends from publicly traded Canadian corporations in the amount of $367,000. In addition, it received non-eligible dividends from the family owned Canadian controlled private corporation in the amount of $108,000. Its only other source of 2020 income was a capital gain of $47,000 on a disposition of investments in publicly traded equity securities.
The only beneficiary of the trust is the family's 23 year old daughter, Francine Renaud. Francine is actively engaged in the private corporation on regular and continuous basis and, as a consequence, the TOSI is not applicable to the income that she receives from the trust. During 2020, $210,000 of the dividends from public companies, all of the dividends from the family's private company, and all of the $47,000 capital gain were distributed to Francine.
Indicate the tax effects of these transactions on the 2020 Net Income For Tax Purposes for both the trust and for Francine. In addition, calculate the federal dividend tax credit available to both the trust and Francine for 2020.

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The income allocation would be as follow...

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