ADMS 3520 Chapter Notes - Chapter 6: Dividend Tax, Accrual, Time Deposit

18 views3 pages
Published on 9 Aug 2012
School
York University
Department
Administrative Studies
Course
ADMS 3520
Income from Property 6-1
Definition:
oincome earned from invested capital
othis includes interest income, dividend income, rental income and royalties
ocapital gains are not considered to be income from property
Interest Income 6-2
- this is income earned from money put on deposit at a bank, or loaned to another person or
corporation
- Interest can be earned from:
oa private loan
oCanada Savings Bonds
oGIC or term deposit
omoney in a savings account
oCorporate bonds
omortgage
- Interest income is taxable when receive
Interest Income 6-3
- Interest income is also taxable on a modified accrual basis for individual taxpayers
- This rule states that interest income must be recorded (accrued) at each anniversary date
of the investment (less any interest previously recorded when received)
Dividend Income Non –Eligible
- Dividends are cash received from the ownership of shares
- These are taxed in an unusual way
oCash received = $120
(Actual dividend)
oTaxable dividend
(Gross-up)
= 120 x 1.25 = 150
oDividend tax credit
2/3 x (150 – 120) = 20
Dividend Income – Eligible
Eligible Dividends have a different tax treatment
Unlock document

This preview shows page 1 of the document.
Unlock all 3 pages and 3 million more documents.

Already have an account? Log in

Document Summary

Definition: income earned from invested capital, this includes interest income, dividend income, rental income and royalties, capital gains are not considered to be income from property. Interest income 6-2 this is income earned from money put on deposit at a bank, or loaned to another person or corporation. Interest can be earned from: a private loan, canada savings bonds, gic or term deposit, money in a savings account, corporate bonds, mortgage. Interest income is also taxable on a modified accrual basis for individual taxpayers. This rule states that interest income must be recorded (accrued) at each anniversary date of the investment (less any interest previously recorded when received) Dividends are cash received from the ownership of shares. These are taxed in an unusual way: cash received = (actual dividend, taxable dividend (gross-up) = 120 x 1. 25 = 150: dividend tax credit.

Get OneClass Grade+

Unlimited access to all notes and study guides.

YearlyMost Popular
75% OFF
$9.98/m
Monthly
$39.98/m
Single doc
$39.98

or

You will be charged $119.76 upfront and auto renewed at the end of each cycle. You may cancel anytime under Payment Settings. For more information, see our Terms and Privacy.
Payments are encrypted using 256-bit SSL. Powered by Stripe.