Mrs. Mantz receives eligible dividend income of $12,000 every year. Her spouse is unable to utilize the spousal credit because of the dividends received by Mrs. Mantz. She is considering transferring the dividends to her spouse which will then enable him to claim some or all of the spousal credit. Under what circumstances would this most likely be tax advantageous?

Question

Quizplus · Accepted Answer

Transferring the dividends to a spouse in a lower tax bracket (15 percent federal tax bracket) can be advantageous due to the progressive nature of tax rates, potentially resulting in overall lower family taxation.

Mrs Mantz Receives Eligible Dividend Income of $12,000 Every Year