BU357 Chapter Notes - Chapter 6: Tax Rate, Dividend Tax, Basis Of Accounting
Document Summary
Anything that is not active income and not capital gains. 3 types of inclusions: interest (t5 for interest income: dividends income from production or use of property rents, royalties, oweness on taxpayer to declare this income. Accrual basis: interest is if you owe someone money it is the fee you pay someone: bond that accrues. Cra states that it must be the earlier of cash or annual accrual method. Declare income that you received within the year. Have to include interest in income at each anniversary date. E(cid:448)e(cid:374) if (cid:455)ou do(cid:374)"t re(cid:272)ei(cid:448)e a(cid:374)(cid:455)thi(cid:374)g the(cid:374) (cid:455)ou (cid:373)ust dis(cid:272)lose of this amount in income. Does(cid:374)"t (cid:373)atter if (cid:455)ou re(cid:272)ei(cid:448)e it or (cid:374)ot: anniversary date= a year less a day from the beginning. Even without receiving income then you pay tax: example: problem 6-1 on p. 312. Deep discount: more than 3% and yield is more than 4/3 the nominal, treated as the capital item (50% is deductible)
