Active Business Income (ABI)

by Tax Guy - Burlington Accountant on February 11, 2010 Print This Post Print This Post

Canadian Controlled Private Corporations (CCPC) have a low rate of tax (known as the Small Business Deduction) on their operating business income that is below $400,000 per year.

An active business is defined any business carried on by the corporation other than a specified investment business or a personal services business and includes an adventure or concern in the nature of trade.

Active business income includes all income from a business including incidental income relating to business activities including interest earned on cash deposits normally used for operations. Active business income does not include income earned from a personal services business or a specified investment business.

In general terms Active Business Income can be thought of as the income earned from regular business operations but does not include investment income in a holding company or income from being an incorporated employee.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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