Maximizing The Small Business Deduction: Preventing Corporations from Being Associated

Barrett Tax Law

The Small Business Deduction.  The government giveth a wondrous gift, but if you're not careful, they taketh back.

Income Tax Act

What is the Ontario Small-Business Deduction?

Different Ways Companies are Considered to be Associated

1. Direct / Indirect Control of a Corporation: one corporation controls the other
2. Common Control of Multiple Corporations: both corporations controlled by the same person / group of people
3. Control by Corporations by Related Parties (aka the 25% Rule): related individuals or groups of individuals each control a corporation, and one relative / group owns at least 25% percent of a non-specified class of shares of the other corporation.

Conclusion

Income Tax Act

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