S3-F2-C1

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Income Tax Folio S3-F2-C1, Capital Dividends

Series 3: Property, Investments and Savings Plans

Folio 2: Dividends

Chapter 1: Capital...

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Summaries

Summary Under
Tax Topics - Income Tax Act - Section 83 - Subsection 83(2)

Full dividend

1.19 An election to pay a capital dividend should be filed on Form T2054 by the earlier of:

the day on which the dividend becomes...
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Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Shareholder

Shareholder

1.20 The definition of shareholder in subsection 248(1) includes a “person entitled to receive payment of a dividend”. This could...
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Summary Under
Tax Topics - Income Tax Act - Section 83 - Subsection 83(3)

90-day limit

1.23 The late filing provisions described in ¶1.21 cease to be available for a particular dividend if a taxpayer does not comply...
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Summary Under
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a)

S. 55(2) gains

1.31.1 An amount deemed to be a gain under paragraph 55(2)(c) is deemed to be realized on a disposition of a capital property at...
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Summary Under
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (b)

Effect of excessive 83(2) election

1.47 ... [E]ven an excessive dividend is included in the recipient corporation’s CDA. However, if the payor...
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Summary Under
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (d)

Reductions under (d)(v) to CDA addition on death

1.60.3 The third and fourth amounts, described in subparagraphs (d)(v) and (vi) of the definition...
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Summary Under
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(z.1)

Calculation of Amalco's CDA

1.80 ...Corporation A:

realized a capital gain of $100,000 in its 2005 tax year, of which the non-taxable portion,...

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Summary Under

Tax Topics - Income Tax Act - Section 184 - Subsection 184(3)

Examples of excess distributions

1.85 An overstatement of the CDA can arise in a number of ways. Examples include:

a corporation might pay a...

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Summary Under

Tax Topics - Income Tax Act - Section 83 - Subsection 83(2.1)

Main reason test

1.95 ... Groupe Honco...confirmed that a person can have more than one main reason for the acquisition of shares. If subsection...

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Words and Phrases

main reason

Summary Under

Tax Topics - Income Tax Act - Section 83 - Subsection 83(2.2)

Overview

1.97 ...Subsection 83(2.2) provides that the anti-avoidance rule will not apply to a capital dividend paid to an individual if,...

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Summary Under

Tax Topics - Income Tax Act - Section 83 - Subsection 83(2.3)

Overview

1.97 ...Subsection 83(2.3) provides that the anti-avoidance rule will not apply to capital dividends paid by a corporation where it is...

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Summary Under

Tax Topics - Income Tax Act - Section 83 - Subsection 83(2.4)

Overview

1.97 ... Subsection 83(2.4) provides that the anti-avoidance rule will not apply to a capital dividend paid to a related corporation...

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Summary Under

Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(b) - Subparagraph 53(1)(b)(ii)

No denied increase where s. 55(2) applied to the s. 84(1) dividend

1.30 Where a deduction under subsection 112(1) is permitted on a dividend that results from an increase in paid-up capital, subparagraph...

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Summary Under

Tax Topics - Income Tax Act - Section 52 - Subsection 52(3) - Paragraph 52(3)(a) - Subparagraph 52(3)(a)(ii)

No denied increase where s. 55(2) applied to the stock dividend

1.30.1 Where a dividend that is deductible under subsection 112(1) results from the receipt of a stock dividend, subclause 52(3)(a)(ii)(A)(II)...

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Summary Under

Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(i) - Clause (a)(i)(C)

Exclusion for gains of CCPC that accrued under exempt or NR-controlled status

1.37 For dispositions occurring after November 26, 1987, another...

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S3-F2-C1

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Income Tax Folio S3-F2-C1, Capital Dividends