Which of the following is true concerning dividends?
A)The system to eliminate double taxation assumes that the corporate tax rate is 27.5% when eligible dividends are grossed-up to include 138% of the dividend.
B)Dividends received from a CCPC's business income that is not subject to the small business deduction are typically grossed-up to include 115% of the dividend.
C)Dividends received from a CCPC's business income that is subject to the small business deduction are typically grossed-up to include 138% of the dividend.
D)Eligible dividends require a 115% gross-up.

Question

Quizplus · Accepted Answer

Eligible dividends are grossed-up by 38%, which means they are included at 138% of the dividend to account for the corporate tax already paid, aligning with the system to eliminate double taxation.

Which of the Following Is True Concerning Dividends