GMR Inc Is a Corporation Owned 100 Percent by Ms

GMR Inc is a corporation owned 100 percent by Ms. Rothstein. For the current year, the company accountant is predicting that taxable income will exceed $500,000. The accountant has suggested that Ms. Rothstein should consider paying herself an additional salary to ensure the taxable income of her CCPC will be less than $500,000. Why?

A) Because only income eligible for the small business deduction benefits from a modest tax deferral and significant tax savings.
B) Because the CRA will never challenge the reasonableness of remuneration to a shareholder, and the accountant must feel that Ms. Rothstein deserves a bonus this year.
C) Because if the income over $500,000 remains in the company it will not benefit from the small business deduction, and therefore after tax retention on this excess income in the company will be lower than it would be on paying a salary to Ms. Rothstein.
D) Because the case for "bonusing down" has gotten stronger in the past few years, and it is therefore more important than ever to take advantage of this possibility to save taxes.