What other business forms would give the same results

Reference no: EM133538345

Question: You are a shareholder in a business that owns real estate assets. The business earns $5,000 before taxes. Once any taxes required are paid at the business level, the business will distribute the rest of its earnings to its owners.

Suppose that in Canada, the corporate tax rate is 32%, the personal tax rate on dividend income is 24% and the personal tax rate on other income is 48%.

Assuming no funds from the earnings are retained in the business, how much is left for the owners after all taxes are paid?

Assume this business is a corporation and the owners hold their shares in a taxable account.
Assume this business is a corporation and the owners hold their shares in a TFSA.
Assume this business is a limited partnership and the owners hold their units in a taxable account.
Assume this business is a limited partnership and the owners hold their units in a TFSA.
What other business forms would give the same results as found in 3 and 4? (Answer: proprietorship for 3, limited partnership equivalent to answers to both parts 3 and 4, REIT for 3 or 4.)

Reference no: EM133538345

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