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T3 Trust Income Allocations Reporting corporate investment income from Income Funds

#1 User is offline   DeniseQ Icon

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Posted 03 April 2007 - 04:51 AM

If a CCPC corporation received income during the year from an income fund (public trust) - can the income still be designated as dividends, capital gains and interest income as per the T3?
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#2 User is offline   Gordon Wiber Icon

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Posted 03 April 2007 - 04:06 PM

Yes - refer to subsections 104(19) & 104(21) - not likely eligible for SBD.
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#3 User is offline   JohnV Icon

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Posted 03 April 2007 - 04:52 PM

Actually it depends :)

IF you can argue the investment income is "incidental", ie it is important to keep the money on hand and reasonably liquid to fund active business operations or anticipated active business re investment requirements, then you can actually include it as active business income. That was decided in a court case...

Remember though that "in the long run", it matters not in that a ccpc's high rate taxed investment income simply adds to the rdtoh account and integration takes care of the differential when dividends are paid.

Still, the small business rate is more attractive in the short run.
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