Transcript
2 February 2026, 04:11pm
Kairui Hu started transcription
Kairui Hu 0:03
Personal computer. Take the outlets here. They should be working. That's
that. Now you're sitting here. Make sure the outlets work, don't have to
carry on the battery life to survive the our 4 to 5 million in the midterm.
Please write in the section that you were enrolled in just so we have
enough seats for everybody. And again, if you're someone with some
extenuating circumstances, you've already reached out to me and they
come to do another arrangement. Obviously that doesn't apply to you, but
I just need.
You know, if you're in the 9:00 AM section normally, but you come to the
11 one, right? You may from the evening to 9:00 AM because I don't want
to have none of us. It's going to be a problem. We don't have to see
everybody. It should be good if people go to the right side.
Turns out, I guess mindsets for it. We've covered the first five classes
including today going to again, I think I'm pretty reasonable with what I
test preparation like the practice by obviously the concepts, the tutorial
problem including this week's tutorial.
We've got connect problems. You know the things we've been discussing
in class, especially the priority. You need a few extra bits of practice, the
demonstration problems in the textbook. Most of them I think are pretty
good. So what you can use demonstration question #4 in chapter 11.
It's an acquisition control question that was the mid was the midterm
question two years ago, exact same question. And so that's one you could
practice, try it, then look at the solutions. I always kind of recommend try
something before you see the answer and they can retain more
information that way.
But that's kind of for midterm. Uh, the I guess the other thing I get a lot of
questions on is the formula sheets.
Again, I well, I'll post something I guess a bit more documented what my
expectations are I guess. But it's like I said, the whole point of the formula
sheet type down a memorization. There's a lot of formulas and rates and
things in this class.
So you can access the textbook during the during the tasks like the digital
textbook. If you have a digital one, you have a hard copy textbook, you
can bring that in. The rest is meant to be just self-prepared notes,
reasonable amounts of self-prepared notes.
I don't want you printing off like solutions, you know, like the concept
solutions and things, just self-prepared notes. You can prepare your notes
electronically and print them. That's fine as long as the other things you
prepared and it's just reference material, not answers. Kind of the idea
,here.
So.
The whole point is so you don't have to memorize, but I'm going to test
you on application and just be reasonable. I'm not putting a page limit
because it's the font size scales to the page limit, right? If I say it's 2
pages, you're going to come in with teeny tiny font. So just if you need 5
pages, OK, but you shouldn't need 100 pages.
So just be reasonable with what you bring in.
And then of course, no use of other Internet sources or, you know, OEI
tools or things. It's pretty telling when people are talking about U.S. tax in
a Canadian tax midterm that they clearly were looking at something that
shouldn't have been. So don't be that person.
My question over here, do you have? Yeah, I should ask for the notes. Are
we allowed to like write down like how to do the question like step by step
like not. I think it's fine like let's say that feel like that table in chapter 13
that's got the old CCPC tax calculation components like that's fine to bring
in, but I don't want you to bring in like.
Like the answer with all the numbers to the tech problem that use that
formula. So things like that.
All right. Any last questions on the midterm? One other administrative
announcement is I'm not going to be able to hold my normal office hours
today. If you do have something you want to chat about, you know, quick
question, just shoot me an e-mail. I'll get back to you for something more
you want to chat about.
Maybe just reach out to me. We can do like a virtual touch point or
something later in the week, but I've got some scheduling conflicts for this
afternoon.
OK, so I think we're ready to get started with content. We're going to
finish up Chapter 13. Hopefully you've had a chance to see the recording
for the snow day class last week. Very important class, the limitations to
small business production.
Make sure you've seen that if you haven't seen it.
Today, though, we're going to be looking mainly at the theme is kind of on
shareholder remuneration. Like shareholder wants to take money out of
the company. How do we do that? What's tax implications? Lots of ways
we can take money out of the company, make sure we understand what
happens in the various ways we can take money out of it.
Before we kind of get into that part, I want to do like a we would have
done this sooner if we didn't have our snow day, but I want to kind of step
back and look at the big picture at these corporate tax calculations that
we've been doing and kind of now reconcile it back to those like a few
times early in the course I threw out.
Oh, the rate is this, the rate is that. Let's now tie back to how do we
reconcile to the actual corporate tax rates. I'm gonna do that real quickly
right now. You can kind of visualize it, particularly for CCPC. You can
visualize. We really have 4 categories to make though.
, We have active business income where we don't have small, where we do
have small business deduction. You can have active business income
where we do not get the small business deduction. We have aggregate
investment income and we have dividend income. I look at OK.
Now like some of these questions we do like chapter 13 questions and the
ones you've been doing in class, the tutorial and connect one.
Like we're seeing kind of a blend of all of this stuff, and when you're
seeing all this stuff kind of blended together, it's kind of easy to miss the
bigger picture, like what is actually happening to all these different
income streams.
If we kind of break this down, we can think of it as right. We had our basic
federal tax, we had our abatements, we had small business deduction, we
had the additional refundable tax, we had the general rate reduction.
Those were our part one tax components, right?
Then there was Part 4 tax.
We know with active business income where we got small business
deduction, so the 38.
Basic federal applied. We had the 10% abatement on that. We got the
19% small business deduction. There's no additional refundable tax.
There's no general rate reduction. There's no Part 4 tax.
Our totals sort of think of it as combined federal.
Neither said.
On our dividend income, if you look at that for a second, we there's no
part one tax on dividends. We kind of talked about that two classes ago
because there's no dividends in our taxable income. We have dividends in
net income. They come out to get the taxable income.
So all the part one tax components have no impact dividend income.
Instead we have Part 4 tax.
Is that 38 and a third?
So dividends, we just had the part 4 tax apply to them active business
income where we didn't get small business deductions while there was the
38 basic amount.
Payment still applied on that stream of income, but no small business
action.
No additional refundable tax. Instead we got the general rate reduction,
no part four tax, so our combined federal rate 15%.
Aggregate investment income again, 38%.
Still got the abatement, no small business deduction. We do have the
additional refundable tax and in 2/3, no general rate reduction, no Part 4
tax.
That's sort of our combined federal rate and then there could be provincial
tax.
I can use Ontario rates here. I don't expect you to know provincial rates.
The CPA program doesn't expect you to know provincial rates. They
expect you to know federal, and then they'll give you provincial if you
need it.
2 February 2026, 04:11pm
Kairui Hu started transcription
Kairui Hu 0:03
Personal computer. Take the outlets here. They should be working. That's
that. Now you're sitting here. Make sure the outlets work, don't have to
carry on the battery life to survive the our 4 to 5 million in the midterm.
Please write in the section that you were enrolled in just so we have
enough seats for everybody. And again, if you're someone with some
extenuating circumstances, you've already reached out to me and they
come to do another arrangement. Obviously that doesn't apply to you, but
I just need.
You know, if you're in the 9:00 AM section normally, but you come to the
11 one, right? You may from the evening to 9:00 AM because I don't want
to have none of us. It's going to be a problem. We don't have to see
everybody. It should be good if people go to the right side.
Turns out, I guess mindsets for it. We've covered the first five classes
including today going to again, I think I'm pretty reasonable with what I
test preparation like the practice by obviously the concepts, the tutorial
problem including this week's tutorial.
We've got connect problems. You know the things we've been discussing
in class, especially the priority. You need a few extra bits of practice, the
demonstration problems in the textbook. Most of them I think are pretty
good. So what you can use demonstration question #4 in chapter 11.
It's an acquisition control question that was the mid was the midterm
question two years ago, exact same question. And so that's one you could
practice, try it, then look at the solutions. I always kind of recommend try
something before you see the answer and they can retain more
information that way.
But that's kind of for midterm. Uh, the I guess the other thing I get a lot of
questions on is the formula sheets.
Again, I well, I'll post something I guess a bit more documented what my
expectations are I guess. But it's like I said, the whole point of the formula
sheet type down a memorization. There's a lot of formulas and rates and
things in this class.
So you can access the textbook during the during the tasks like the digital
textbook. If you have a digital one, you have a hard copy textbook, you
can bring that in. The rest is meant to be just self-prepared notes,
reasonable amounts of self-prepared notes.
I don't want you printing off like solutions, you know, like the concept
solutions and things, just self-prepared notes. You can prepare your notes
electronically and print them. That's fine as long as the other things you
prepared and it's just reference material, not answers. Kind of the idea
,here.
So.
The whole point is so you don't have to memorize, but I'm going to test
you on application and just be reasonable. I'm not putting a page limit
because it's the font size scales to the page limit, right? If I say it's 2
pages, you're going to come in with teeny tiny font. So just if you need 5
pages, OK, but you shouldn't need 100 pages.
So just be reasonable with what you bring in.
And then of course, no use of other Internet sources or, you know, OEI
tools or things. It's pretty telling when people are talking about U.S. tax in
a Canadian tax midterm that they clearly were looking at something that
shouldn't have been. So don't be that person.
My question over here, do you have? Yeah, I should ask for the notes. Are
we allowed to like write down like how to do the question like step by step
like not. I think it's fine like let's say that feel like that table in chapter 13
that's got the old CCPC tax calculation components like that's fine to bring
in, but I don't want you to bring in like.
Like the answer with all the numbers to the tech problem that use that
formula. So things like that.
All right. Any last questions on the midterm? One other administrative
announcement is I'm not going to be able to hold my normal office hours
today. If you do have something you want to chat about, you know, quick
question, just shoot me an e-mail. I'll get back to you for something more
you want to chat about.
Maybe just reach out to me. We can do like a virtual touch point or
something later in the week, but I've got some scheduling conflicts for this
afternoon.
OK, so I think we're ready to get started with content. We're going to
finish up Chapter 13. Hopefully you've had a chance to see the recording
for the snow day class last week. Very important class, the limitations to
small business production.
Make sure you've seen that if you haven't seen it.
Today, though, we're going to be looking mainly at the theme is kind of on
shareholder remuneration. Like shareholder wants to take money out of
the company. How do we do that? What's tax implications? Lots of ways
we can take money out of the company, make sure we understand what
happens in the various ways we can take money out of it.
Before we kind of get into that part, I want to do like a we would have
done this sooner if we didn't have our snow day, but I want to kind of step
back and look at the big picture at these corporate tax calculations that
we've been doing and kind of now reconcile it back to those like a few
times early in the course I threw out.
Oh, the rate is this, the rate is that. Let's now tie back to how do we
reconcile to the actual corporate tax rates. I'm gonna do that real quickly
right now. You can kind of visualize it, particularly for CCPC. You can
visualize. We really have 4 categories to make though.
, We have active business income where we don't have small, where we do
have small business deduction. You can have active business income
where we do not get the small business deduction. We have aggregate
investment income and we have dividend income. I look at OK.
Now like some of these questions we do like chapter 13 questions and the
ones you've been doing in class, the tutorial and connect one.
Like we're seeing kind of a blend of all of this stuff, and when you're
seeing all this stuff kind of blended together, it's kind of easy to miss the
bigger picture, like what is actually happening to all these different
income streams.
If we kind of break this down, we can think of it as right. We had our basic
federal tax, we had our abatements, we had small business deduction, we
had the additional refundable tax, we had the general rate reduction.
Those were our part one tax components, right?
Then there was Part 4 tax.
We know with active business income where we got small business
deduction, so the 38.
Basic federal applied. We had the 10% abatement on that. We got the
19% small business deduction. There's no additional refundable tax.
There's no general rate reduction. There's no Part 4 tax.
Our totals sort of think of it as combined federal.
Neither said.
On our dividend income, if you look at that for a second, we there's no
part one tax on dividends. We kind of talked about that two classes ago
because there's no dividends in our taxable income. We have dividends in
net income. They come out to get the taxable income.
So all the part one tax components have no impact dividend income.
Instead we have Part 4 tax.
Is that 38 and a third?
So dividends, we just had the part 4 tax apply to them active business
income where we didn't get small business deductions while there was the
38 basic amount.
Payment still applied on that stream of income, but no small business
action.
No additional refundable tax. Instead we got the general rate reduction,
no part four tax, so our combined federal rate 15%.
Aggregate investment income again, 38%.
Still got the abatement, no small business deduction. We do have the
additional refundable tax and in 2/3, no general rate reduction, no Part 4
tax.
That's sort of our combined federal rate and then there could be provincial
tax.
I can use Ontario rates here. I don't expect you to know provincial rates.
The CPA program doesn't expect you to know provincial rates. They
expect you to know federal, and then they'll give you provincial if you
need it.
