Taxation of Investments

Taxation of Investments provides a comprehensive and practical examination of how investment income is taxed in Canada under the Income Tax Act (ITA). Designed for CPA candidates, accounting professionals, and financial advisors, this course builds a deep understanding of the tax treatment of interest income, dividend income, capital gains, rental income, and investment income earned through individuals, corporations, and trusts. The course begins with a foundational overview of investment income and its classification, highlighting the critical distinctions between active business income, passive investment income, and capital gains. Learners will explore why these distinctions matter, how misclassification can trigger CRA reassessments, and how proper characterization impacts tax rates, deductions, and deferral opportunities. A significant focus is placed on tax integration, explaining how Canada’s tax system seeks to align corporate and personal taxation through mechanisms such as the dividend gross-up and dividend tax credit, Refundable Dividend Tax on Hand (RDTOH), and the Capital Dividend Account (CDA). Real-world examples demonstrate how investment income earned inside corporations is taxed, refunded, and ultimately distributed to shareholders. The course also delivers in-depth coverage of: Interest income taxation, including accrual rules, strip bonds, premium and discount bonds, and structured notes Dividend taxation, distinguishing eligible vs. non-eligible dividends and the treatment of foreign dividends Capital gains taxation, including the 50% inclusion rate, adjusted cost base (ACB) tracking, superficial loss rules, and CRA criteria for business income vs. capital gains Investment income earned by individuals, corporations, and trusts, with an emphasis on compliance and tax efficiency Interest deductibility rules under paragraph 20(1)(c) of the ITA and common CRA audit issues Tax deferral and planning strategies, including registered accounts, flow-through shares, stock options, and corporate investment structures Throughout the course, learners apply technical rules to practical scenarios, developing the ability to advise clients, structure investments tax-efficiently, and navigate complex CRA compliance requirements with confidence.