Module 4: Investment Income: Reporting Interest &Dividens

Question 1

Interest paying investments

Answer 1

• bank accounts
• teem deposits
• GICs
• bonds
• loans
• mutual funds
• Etfs

Taxable at client tax return @ full tax rate

Question 2

Main slips for investment income

Answer 2

T5- organizations, corporations, and institutions

T3- issued by trusts(mutual fund) , mutual funds, estates and trusts

Report on: Section 2 of sch 4

Question 3

Dividend Income

Answer 3

Dividends: distribution of profits by securities (stocks and mutual funds)

Canadian corp: 2 types of dividends
- Eligible dividends :
- Non eligible : more favourable tax treatment

Question 4

Dividends: Eligible vs non eligible

Answer 4

Cdn corp:
- non eligible: gross up 115%
- eligible: gross up 138%

Non cdn corp: dividend = regular income: not grossed up, no div tax cr

T3 and T5 slips

Question 5

Dividens tax credit– what is it and how does it help?