If you own shares in a private corporation, say a small family
business, you'll know that there are many tax advantages
– a host of deductions, writeoffs, and other tax breaks to
help keep your business solvent. But what you might not know is
that there some tax traps that aren't as well known. And if you
fall afoul of these, you could be bringing on a world of tax
trouble. Here's a look at these traps, and how to avoid
them.
First, let's look at the biggest and most visible tax break
for small incorporated businesses, and the one that can cause the
most tax trouble through something called the "association
trap."
The Small Business Tax Deduction
Carrying on a business through a corporation offers up a number
tax advantages, notably access to the Small Business Deduction for
Canadian corporations. If a Canadian-controlled corporation
(let's call it "Opca") carries on an "active
business" in Canada, it will be entitled to get the Small
Business Deduction tax
