Mr. Marcus Fisher has investments that generate interest income of $94,000 per year. Because of his employment income, he is in the top tax bracket, with a combined federal/provincial rate of 52 percent. He is considering the transfer of these investments on January 1, 2020, to his CCPC which would be subject to a tax rate on investment income of 51 percent. The dividend tax credit in his province is equal to 30 percent of the gross up. Any dividends paid by the CCPC out of investment income will be non-eligible. Advise him as to whether there would be any tax benefits associated with this transfer.

Question

Quizplus · Accepted Answer

The Answer of Mr. Marcus Fisher has investments that generate interest income of $94,000 per year. Because of his employment income, he is in the top tax bracket, with a combined federal/provincial rate of 52 percent. He is considering the transfer of these investments on January 1, 2020, to his CCPC which would be subject to a tax rate on investment income of 51 percent. The dividend tax credit in his province is equal to 30 percent of the gross up. Any dividends paid by the CCPC out of investment income will be non-eligible. Advise him as to whether there would be any tax benefits associated with this transfer.

Mr Marcus Fisher Has Investments That Generate Interest Income of $94,000