CCC Inc. is a Canadian controlled private corporation. During the year, CCC Inc. made charitable donations of $13,000. It has a charitable donation carry forward from the preceding year of $2,000. CCC Inc.'s Net Income For Tax Purposes for the current year consisted of $91,000 of active business income, $10,000 of dividends from taxable Canadian corporations and a net rental loss of $84,000. The maximum charitable donation deduction for CCC Inc. in the current year is:

Question

Quizplus · Accepted Answer

The maximum charitable donation deduction for a corporation is limited to 75% of the its net income for tax purposes.

Step 1: Calculate the net income for tax purposes:

Active business income: $91,000 
Dividends from taxable Canadian corporations: $10,000 
Net rental loss: -$84,000

Net income for tax purposes = $17,000

Step 2: Calculate the maximum charitable donation deduction:

75% x ($17,000 + $2,000 carry forward) = $12,750

Therefore, the maximum charitable donation deduction for CCC Inc. in the current year is $12,750.

CCC Inc Is a Canadian Controlled Private Corporation