Calculate the tax difference between a British Columbia resident and an Ontario resident both having $20,000 in capital gains and $10,000 in eligible dividends.

Question

Quizplus · Accepted Answer

The tax rates for capital gains and eligible dividends are different in British Columbia and Ontario.

For capital gains, the tax rate in British Columbia is 25%, while in Ontario it is 24.76%.

For eligible dividends, the tax rate in British Columbia is 12.55%, while in Ontario it is 10.03%.

Therefore, the calculation for the tax difference is:

Tax in British Columbia = (0.25 * 20,000) + (0.1255 * 10,000) = $5,138.00

Tax in Ontario = (0.2476 * 20,000) + (0.1003 * 10,000) = $4,250.00

The tax difference between the two provinces is $888.00 less in British Columbia than in Ontario.

Calculate the Tax Difference Between a British Columbia Resident and an Ontario