Corporate Investment Income Part 1

Anyone who has tried to navigate the investment income landscape over the last few years has likely found themselves caught in a web of confusion. Even seasoned tax practitioners have had a difficult time wrapping their minds around the myriad of new rules and legislation recently enacted by the government in their quest to make the tax system more equitable.

Unfortunately, in their attempt to make things more fair for all Canadians, the government has created an intricate set of rules that has created confusion, and in a lot of cases, anxiety for many practitioners.

This course will provide you with a GPS to help you find your way through this complicated area of tax and help you navigate these tricky roads.

The ultimate objective of this course is not only to review and explain the investment concepts an easy to digest manner, but also help you form a deep understanding of these complex topics. This is done by not only explaining the conceptual framework of investment income but also showing you how it all comes together in the reporting of investment income on the actual T2 Corporate Tax Return.

WHAT YOU WILL LEARN

• Refundable Dividend Tax On Hand Accounts – The new ERDTOH and NERDTOH pools have created a lot of confusion and have created some mind-boggling tax outcomes for preparers who are unfamiliar with the differences between these accounts and how to pay out dividends effectively. It also clears up many of the misconceptions about these accounts and paying dividends to shareholders

• Sorting Through All Those Pools – Navigating investment income requires practitioners to understand various pools and how they all intertwine and work together like the gears in your vehicle. GRIP and LRIP pools, ERDTOH and NERDTOH pools, Active income and Passive Income Pools. You’ll need to understand and piece these all together to complete the T2 tax return and do the tax planning for owner-managers.

• Integration - You will finally have a good understanding of investment integration tables for the different types of investment income and how they help you determine the opportunity for tax deferrals and overall strategies for investment income in corporations

This course will also run through some real world examples and provide details on how to report investment income and all its nuances on the Corporate T2 return and related Investment Income Schedules.

We will examine a Professional Dentistry Corporation as well as a Windows & Doors manufacturing company to illustrate actual T2 returns, the reporting framework and decision-making process.