Which of the following statements with respect to dividends is NOT correct?
A)Capital dividends can be received by individuals without tax consequences.
B)All taxable dividends paid by Canadian controlled private corporations are non-eligible dividends.
C)Stock dividends are subject to the same gross up and tax credit procedures as cash dividends.
D)Dividend tax credits are based on a percentage of the gross up on dividends received.

Question

Quizplus · Accepted Answer

Not all dividends paid by Canadian controlled private corporations (CCPCs) are non-eligible dividends. CCPCs can pay out eligible dividends if they have income taxed at the general corporate rate, which can then be designated as eligible dividends to shareholders, potentially leading to a lower personal tax rate on those dividends compared to non-eligible dividends.

Which of the Following Statements with Respect to Dividends Is