What are capital dividends and the capital dividend account (CDA) in my small business corporation?
Allan Madan, CA
The capital dividend account maintains fair integration between an individual and corporation. When an individual incurs a capital gain only 50% is taxable and the remaining 50% is tax free. When a corporation incurs a capital gain the same concept applies. The non-taxable portion of a capital gain realized by a corporation is added to the capital dividend account. Capital dividends received by individuals are tax-free. The Capital dividend account balance is carried forward yearly on your corporate tax return.
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
.png)
SOCIAL CONNECT