Chapter 9 (Shareholder tax planning)

Question 1

What are the 3 exceptions to the limited liability aspect of corporations?

Answer 1

Personal guarantees, Professional corporations, Corporate directors

Question 2

What is the eligible dividend tax rate?

Answer 2

34.31%

Question 3

What is the non-eligible dividend tax rate?

Answer 3

42.30%

Question 4

What is the tax rate on all other personal income?

Answer 4

48%

Question 5

ABI w/ SBD tax rate?

Answer 5

11%

Question 6

Where does the greatest tax deferral opportunity arise from?

Answer 6

ABI w/ SBD inside a CCPC

Question 7

ABI w/o SBD tax rate?

Answer 7

23%

Question 8

AII (excludes dividend income) tax rate?

Answer 8

46.67%

Question 9

Dividend income subject to Part IV tax?

Answer 9

38.33%

Question 10

What single income group only applies to a public corporation?

Answer 10

Aggregate investment income

Question 11

How much in eligible dividends can be received tax-free?

Answer 11

$55,000

Question 12

How much in non-eligible dividends can be received tax-free?

Answer 12

$26,858

Question 13

What are the 3 exceptions to TOSI being subject to the highest tax rate?

Answer 13

1. (18+) actively involved
2. (25+) owns 10%
3. (25+) income reflects reasonable return

Question 14

What do we do with a Shareholder Loan Receivable that has existed for two years?

Answer 14

Remove the shareholder loan receivable from the balance sheet and turn it into a dividend (prepare T5 for the shareholder)

Question 15

What 5 scenarios is a shareholder loan treated as a conventional dividend?

Answer 15

1. Arms-length
2. Own <10%
3. Acquiring a home
4. Acquiring shares
5. Acquiring vehicle

Question 16

What account must you look at to see if an Eligible Dividend can be paid out?

Answer 16

GRIP balance

Question 17

What applies to a shareholder loan while it is being treated as a conventional loan?

Answer 17

Imputed interest benefit

Question 18

What rate is the dividend refund?

Answer 18

30.67%