Dividend Income Received by Investors

KNOWLEDGE EXPECTED OF: QAFP® Professionals

Highest Knowledge Level: Application

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define types of dividends, such as:
    • Eligible1
    • Other than eligible2
    • Capital
    • Foreign

Dividends Received by an Individual from a Canadian Corporation 

  • Explain the purpose of the federal dividend tax credit.  
  • Identify the gross-up rates for dividend income received from a Canadian corporation.3
  • Estimate the dividend gross-up for dividend income received from a Canadian corporation. 
  • Explain the dividend tax credit for dividend income received from a Canadian corporation. 
    • For eligible dividends
    • For other than eligible dividends 
  • Explain the income tax treatment of dividend income received from a Canadian corporation.  
  • Explain the criteria for dividend income to be transferred between spouses.
Dividends Received by an Individual from a Non-Resident (Foreign) Corporation   
  • Explain the tax treatment of dividend income received from a non-resident (foreign) corporation.4
  • Identify that a foreign dividend tax credit may exist and be applied to dividend income received from a non-resident (foreign) corporation.  

Dividends Received by an Individual from a Trust

  • Explain the tax treatment of receiving dividends from a trust.

REFERENCES

KNOWLEDGE EXPECTED OF: CFP® Professionals

Highest Knowledge Level: Application

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define types of dividends, such as:
    • Eligible1
    • Other than eligible2
    • Capital
    • Foreign

Dividends Received by an Individual from a Canadian Corporation 

  • Explain the purpose of the federal dividend tax credit.  
  • Identify the gross-up rates for dividend income received from a Canadian corporation.3
  • Estimate the dividend gross-up for dividend income received from a Canadian corporation. 
  • Explain the dividend tax credit for dividend income received from a Canadian corporation. 
    • For eligible dividends
    • For other than eligible dividends 
  • Explain the income tax treatment of dividend income received from a Canadian corporation.  
  • Explain the criteria for dividend income to be transferred between spouses.
Dividends Received by an Individual from a Non-Resident (Foreign) Corporation   
  • Explain the tax treatment of dividend income received from a non-resident (foreign) corporation.4
  • Identify that a foreign dividend tax credit may exist and be applied to dividend income received from a non-resident (foreign) corporation. 

Dividends Received by an Individual from a Trust

  • Explain the tax treatment of receiving dividends from a trust.
Additional Knowledge Expected of CFP Professionals
  • Estimate the income tax impact of dividend income received from a Canadian corporation.
  • Estimate the income tax impact of dividend income received from a non-resident (foreign) corporation.
  • Estimate the income tax impact of dividend income received from a trust. 

REFERENCES

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