Bartlett Operations Inc. is a Canadian controlled private corporation throughout 2020. It has Net Income For Tax Purposes of $476,000, a figure that includes $424,000 in manufacturing and processing profits (as per ITR 5200). The $476,000 also includes foreign source business income of $25,000 and taxable capital gains of $27,000. Because of withholding on the foreign source business income, the Company is entitled to a foreign tax credit of $3,700. The Company's only deduction in the calculation of Taxable Income is donations to registered Canadian charities in the amount of $201,000. Bartlett is not associated with any other company and anticipates large increases in Taxable Income in the next few years.
Determine the amount of Bartlett's small business deduction and M&P deduction for the year ending December 31, 2020, assuming that the Company deducts all of the $201,000 of charitable donations. Do you believe that deducting all of the donations is the best alternative for Bartlett? Explain your conclusion.

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The Answer of Bartlett Operations Inc. is a Canadian controlled private corporation throughout 2020. It has Net Income For Tax Purposes of $476,000, a figure that includes $424,000 in manufacturing and processing profits (as per ITR 5200). The $476,000 also includes foreign source business income of $25,000 and taxable capital gains of $27,000. Because of withholding on the foreign source business income, the Company is entitled to a foreign tax credit of $3,700. The Company's only deduction in the calculation of Taxable Income is donations to registered Canadian charities in the amount of $201,000. Bartlett is not associated with any other company and anticipates large increases in Taxable Income in the next few years.
Determine the amount of Bartlett's small business deduction and M&P deduction for the year ending December 31, 2020, assuming that the Company deducts all of the $201,000 of charitable donations. Do you believe that deducting all of the donations is the best alternative for Bartlett? Explain your conclusion.