Victor is confused, so he has come to you for advice. He has heard that not...

 

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Victor is confused, so he has come to you for advice. He has heard that not all dividends are treated the same, so he would like you to explain how the following are taxed to decide where he should invest his money. Victor is in the top tax bracket, which is 53%. Assume the following: (1) $1,000 of dividends from Canadian public companies. (2) $1,000 of dividends from Canadian private companies earning active business income taxed at the low rate. (3) $900 of dividends from foreign public companies. $100 was deducted at source and remitted to the foreign government. Dividends from public companies: the dividend tax credit is equal to %u (federal) and %1 (provincial) of the gross-up. • Dividends from Canadian private companies earning active business income taxed at the low rate: the dividend tax credit is equal to (federal) and %n (provincial) of the gross-up. Victor is confused, so he has come to you for advice. He has heard that not all dividends are treated the same, so he would like you to explain how the following are taxed to decide where he should invest his money. Victor is in the top tax bracket, which is 53%. Assume the following: (1) $1,000 of dividends from Canadian public companies. (2) $1,000 of dividends from Canadian private companies earning active business income taxed at the low rate. (3) $900 of dividends from foreign public companies. $100 was deducted at source and remitted to the foreign government. Dividends from public companies: the dividend tax credit is equal to %u (federal) and %1 (provincial) of the gross-up. • Dividends from Canadian private companies earning active business income taxed at the low rate: the dividend tax credit is equal to (federal) and %n (provincial) of the gross-up.

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1 1000 of dividends from Canadian public companies Dividend 38 grossup taxable dividend ... View the full answer