47 What is the Small Business Deduction and how is it determined?

The small business deduction is a critical element of corporate taxation.   For this course you’ll need to know the following:

• What is the Small Business Deduction
• What is it designed to do/why does it exist?
• What are the mechanics of the calculation?
• How does it tie into the associated company rules?
• How the new rules on passive income impact the SBD.
• Relevant ITA resources

Here are some resources for your review.

References and Resources:

• ITA – 125
• Article – “Small business deduction rules” (Author: Government of Canada)
• Article – “T2 Corporation – Income Tax Guide – Chapter 4: Page 4 of the T2 return” (Author: Government of Canada)