Is there any difference on tax treatment of dividend incomes earn from trust fund/income trust and regular stock?
If there is, how different from one to the other?
If there is, how different from one to the other?
Tax treatment
- Thread starter gentle_lover
- Start date
I'm no tax expert...but from what I understand income from income trusts is not the same as from eligible Canadian corporations, i.e. dividend income, when it comes to taxes. Income from these income trusts or funds is straight income - no dividend tax credit.
And when you say trust fund/income trusts I assume you mean those that are traded on the TSX with .UN as a suffix.
And when you say trust fund/income trusts I assume you mean those that are traded on the TSX with .UN as a suffix.
Off the top of my head: The dividend portion of an income trust distribution is not considered an "Eligible dividend", but that received from a regular corporation is almost always considered an eligible dividend. In order to be an eligible dividend the entire distribution has to be classified as a dividend (and the corporation has to give notice as well that it is an eligible dividend). An income trust's distribution is comprised of different tax allocations (Other/Interest, ROC, Cap Gains, Divs) therefore it is not eligible. There you go, I may be a bit off but if you need anymore info then just visit CRA website and/or google it to death 
gentle_lover said:
There are two types of dividends from canadaian corporations,
eligible dividends (from large corporations) and non-eligible dividends (from
other corporations). Taxation is less for the eligible dividends.
"dividends" or rather payments from income trusts are usually a mixture of
income and Return of capital. The mix is explained on the tax slip you get
from the income trust in april.
That's right. The ones that traded on TSX with suffix .UN. When you go to globeinvestor.com or even online broker, you can see its dividend amount per share and the dividend yields.Mencken said:
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