Schedule 28, Election not to be Associated Through a Third Corporation
Schedule 28, Election not to be Associated Through a Third Corporation
File Schedule 28 if a CCPC that is associated with two other corporations elects under subsection 256(2) for the two other corporations not to be associated with each other for the purposes of the small business deduction.
Note
Two corporations (Corps A and B) that are not
associated with each other are considered associated
under subsection 256(2) if they are associated with the
same corporation (the third corporation).
When the CCPC (the third corporation) makes this election, its business limit for the small business deduction is considered to be zero.
Investment income received from either of the two other corporations' active business will be ineligible for the small business deduction as it will not be treated as active business income.
Corps A and B remain associated with the CCPC. They must include the taxable capital limit of the CCPC when calculating the small business deduction.
The CCPC has to file a new election for each applicable tax year.
Reference
Subsection 256(2)
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