Safe Income May Vary Within Shares of the Same Class
August 31, 2018 | In-Depth Articles
The anti-surplus-stripping provision in subsection 55(2), which can recharacterize a dividend as a capital gain, is not of concern if the corporate group has sufficient safe income (retained earnings with certain adjustments). However, one peculiarity of the calculation of safe income is that safe income on hand is calculated on a share-by-share basis, based on the length of time that the shareholder has owned that particular share…
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