RSM324H1 Chapter Notes - Chapter 7: Property Income, Dividend Tax, Accrual
Document Summary
Income from property can be generally defined as the return on invested capital where little/no time, labour, or attention has been expended by the investor in producing the return: includes: Income isn"t property income simply because of its nature: i. e. interest income is business income for a financial institution. Property income reflects the net property income it takes into consideration both the revenues and expenses incurred to earn the revenues. Certain interest and dividends from qualified investments held by an individual"s tfsa may be exempt from tax. The normal taxation year for individuals (calendar year) and corporations (fiscal year), apply to property income. An individual can maximize after-tax cash flow in two ways: personal assets should (where possible) be acquired with excess cash. The obtained assets can then be used as collateral to obtain loans for investment purposes: when individuals have both personal/investment loans, excess cash should first be used to repay the personal loans that are incurring non-deductible interest.
