Canadian Taxation of Investments

Chapter 24 connects investment decisions to after-tax results. It covers the Canadian tax system, capital gains and losses, registered plans, and the planning techniques that change how investment income is taxed across households and accounts.

Students should treat this chapter as an application chapter rather than a memorization chapter. The exam often asks which account type, disposition rule, or planning choice produces the strongest after-tax outcome in a specific fact pattern.

Exam Focus

• Distinguish interest, dividends, and capital gains by tax treatment and planning consequence.
• Understand how registered plans defer, shelter, or redirect tax and how contribution or withdrawal rules affect strategy.
• Apply attribution, superficial-loss, income-splitting, and carrying-charge concepts to common planning scenarios.

In this section

• Canadian Tax System
  The Canadian taxation system for investors, including residency, self-assessment, income types, deductions, credits, and the tax treatment of common investment income.
• Capital Gains, Losses, and Adjusted Cost Base
  Capital gains and losses in Canada, including ACB, dispositions, superficial losses, carryovers, and current inclusion-rate context.
• Registered and Tax-Free Plans
  Canadian tax-deferral and tax-free plans, including RRSPs, RRIFs, TFSAs, FHSAs, pension plans, RESPs, and RDSPs.
• Tax Planning for Investors
  Canadian tax planning strategies for investors, including tax-loss harvesting, asset location, income splitting, carrying charges, and basic estate-related planning.