Simon Williams owns 100 percent of Wonder Technologies Inc.Peter Maximoff owns 100 percent of Speedy Delivery Service Ltd.Simon and Peter each own 50 percent of
Scarlet Decorating Ltd.Simon is married to Peter's sister, Wanda.
Assuming each of the three corporations is a CCPC and has at least $500,000 of active business income earned in Canada, what is the maximum combined corporate income on which the three corporations can claim the small business deduction?

Question

Quizplus · Accepted Answer

Each corporation can claim the small business deduction on the first $500,000 of active business income earned in Canada, for a total of $1,500,000. Since each corporation has at least $500,000 of active business income, the maximum combined income on which they can claim the small business deduction is $1,000,000 (the sum of each corporation's $500,000 limit).

Simon Williams Owns 100 Percent of Wonder Technologies Inc