Corporate Investment Income Part 2

In Part 1 of this series, we reviewed the conceptual framework of the corporate investment income regime and preparing typical corporate T2 returns when there is investment income to report. That course showed you the complexities involved when corporations have investment income.

In this second course, we dive into other important investment income topics that affect our client base. In particular, we analyze the new tax regime for corporations that have investment income over $50,000 and how their small business corporate tax rates are affected.

We also dig into investment income expenses and analyze some of the common questions practitioners have when dealing with investment income and expenses. Can I pay a salary to offset the higher taxes? Can I pay a bonus to get the investment income below $50,000? Should I claim investment expenses against dividend income to reduce the Part IV tax? All of these questions will be examined with actionable options.

Also included are the following topic areas to help round out and solidify your knowledge of investment income:

WHAT YOU WILL LEARN • Capital Dividend Account (CDA) – A detailed look at the mechanics of the CDA calculation along with a detailed breakdown of the step-by-step process you’ll need to follow to pay out these tax free dividends

• The New Small Business Deduction Grind – Corporations and corporate groups that have over $50,000 in passive income will see their tax rates increase considerably. In many instances, income over this level can create tax rates of up to 125% or more.

• Connected Corporations – We will review the process of paying dividends to connected corporations and how the Refundable Taxes are calculated and administered when there are numerous corporations in corporate group.

• Investment Expenses - What happens when a corporation has both active business income and investment income and has direct investment expenses. As we’ll see there are plenty of little nuances that can make a big difference in a corporation’s tax bill. We also review the issues and challenges of deducting investment expenses including some tricky nuances and traps that, if not known and fully understood, could lead to increased corporate taxes for our clients.

This course takes a practical hands-on approach by examining all these topics not only conceptually, but practically as well. We will take you through all the necessary forms, schedules, CRA and T2 filing requirements, and reporting for all the topics examined.