Please take a look at the attached file it is a Taxation course.

Question 1 (7 marks)

RFL Inc., a Canadian-controlled private corporation, has a July 31 year-end. It is not associated with any other corporation. Its tax manager has estimated its 2018 federal income tax liability at $48,000 on taxable income estimated to be $250,000. Its federal income tax liability for 2017 was $24,000 on taxable income of $187,000, and its federal income tax liability for 2016 was $18,000 on taxable income of $140,000. RFL Inc does not have a “perfect compliance history” when it comes to paying quarterly instalments.

1. Provide the tax manager with a schedule indicating the date and minimum amount of each instalment that the corporation is required to pay in respect of its 2018 taxation year.

1. When must the final balance of federal income tax be paid for the 2018 taxation year? Specify the conditions to permit that date.

1. What is the filing deadline for the 2018 income tax return of the corporation?

Question 2 (18 marks)

The following transactions pertain to independent Canadian-controlled private corporations and their shareholders. Each transaction described below is separate and distinct from the other transactions.

1. Ethan Ltd. issued 150 preferred shares for $11,000 cash plus assets with a fair market value of $3,000. The paid-up capital account was increased by $100 per share, as a result of the share issue. (6 minutes)

1. Maya Ltd. redeemed its preferred shares for $15,000. The shares have a paid-up capital of

$11,000 and an adjusted cost base (“ACB”) of $10,000. (10 minutes)

Assume that the corporation has no general rate income pool (“GRIP”) balance at all relevant times.

Required:

For each of the above transactions, calculate:

1. the income of the shareholder,

1. the PUC of the shares to the corporation after the transaction, and

1. the ACB of the shares to the shareholder after the transaction.

Show all calculations.

Question 3 – 10 marks

The following assets are to be transferred under section 85 for consideration including common shares plus boot as indicated below:

For each of the assets transferred, specify the elected amount and both show and explain the related tax consequences.