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During the Year, the Light Corporation Paid $550,000 in Preferred

Question 6

Multiple Choice

During the year, The Light Corporation paid $550,000 in preferred share dividends to ABC Inc. Both companies are Canadian corporations. Which of the following is TRUE?

A) The Light Corporation will have to pay Part VI.1 tax on the dividend, regardless of whether or not it has taxable income.
B) ABC Inc. will have to pay Part VI.1 tax on the dividend, regardless of whether or not it has taxable income.
C) ABC Inc. will have to pay Part VI.1 tax on the dividend, only if it has taxable income.
D) The Light Corporation will have to pay Part VI.1 tax on the dividend, only if it has taxable income.

Correct Answer: