knowledge topics
Interest Income Received by Investors
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define interest income.
- Explain the methods for reporting interest income, such as:
- Cash method
- Receivable method
- Annual accrual method
- Explain the method for how interest income must be reported.
- For an individual taxpayer
- For a corporation
- For a trust
- Explain the income tax impact of interest income received by an individual.
- Estimate the income tax impact of interest income received by an individual.
- Explain the income tax impact of interest income received by a Canadian Controlled Private Corporation (CCPC) specifically knowledge such as:
- Aggregate investment income subject to Part I tax
- Ineligible for small business or general rate reduction in tax rate
- Impact on Refundable Dividend Tax On Hand (RDTOH) account
- Explain the income tax impact of interest income received by a trust.
- When maintained in the trust
- When distributed to beneficiary(ies) of the trust
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
previous / Non-Taxable Income and Receipts