Overton Ltd. is a Canadian controlled private corporation. During 2020, the Company received the following amounts of dividends: Overton Ltd. owns 100 percent of the voting shares of Saston Inc. and 40 percent of the voting shares of Raston Inc. The fair market value of the Raston Inc. shares equals 40 percent of the fair market value of all Raston Inc. shares. As a result of paying the $90,000 dividend, Raston Inc. received a dividend refund of $25,000. Saston Inc. received no dividend refund for its dividend payment.
Determine the amount of Part IV Tax Payable by Overton Ltd. as a result of receiving these dividends.

Question

Overton Ltd. is a Canadian controlled private corporation. During 2020, the Company received the following amounts of dividends:  Overton Ltd. owns 100 percent of the voting shares of Saston Inc. and 40 percent of the voting shares of Raston Inc. The fair market value of the Raston Inc. shares equals 40 percent of the fair market value of all Raston Inc. shares. As a result of paying the $90,000 dividend, Raston Inc. received a dividend refund of $25,000. Saston Inc. received no dividend refund for its dividend payment.
Determine the amount of Part IV Tax Payable by Overton Ltd. as a result of receiving these dividends.

Quizplus · Accepted Answer

The Answer of Overton Ltd. is a Canadian controlled private corporation. During 2020, the Company received the following amounts of dividends:  Overton Ltd. owns 100 percent of the voting shares of Saston Inc. and 40 percent of the voting shares of Raston Inc. The fair market value of the Raston Inc. shares equals 40 percent of the fair market value of all Raston Inc. shares. As a result of paying the $90,000 dividend, Raston Inc. received a dividend refund of $25,000. Saston Inc. received no dividend refund for its dividend payment.
Determine the amount of Part IV Tax Payable by Overton Ltd. as a result of receiving these dividends.