What Is the Capital Dividend Account?
The Capital Dividend Account or CDA, is a notional tax account that tracks certain tax free amounts earned or received by a private Canadian corporation. A private corporation can use its CDA to pay capital dividends that are generally tax free to Canadian resident shareholders. The CDA is not a bank account. It does not […]
How Does the Capital Dividend Account Work With Life Insurance?
When a private Canadian corporation receives life insurance proceeds after an insured person dies, the proceeds can increase its Capital Dividend Account or CDA. The CDA credit is generally the death benefit received less the policy’s adjusted cost basis immediately before death. The corporation may then use its available CDA balance to pay a capital […]
Is Corporate Owned Life Insurance Tax Deductible?
No. Corporate owned life insurance premiums are not tax deductible in Canada. A corporation may deduct a limited part of the premium only when a qualifying lender requires the policy as collateral for a business loan. Why Is Corporate Owned Life Insurance Not Tax Deductible? Corporate owned life insurance premiums are not tax deductible because […]
What Is Corporate Owned Life Insurance?
Corporate owned life insurance is a life insurance policy owned by a corporation. The corporation pays the premiums and receives the death benefit when the insured person dies. It is often used by incorporated business owners to protect the company, fund a buy sell agreement, repay debt or create liquidity for estate and succession needs. […]
Open vs Closed Mortgage in Canada: Are You Paying a Flexibility Tax?
Walking into a Canadian bank or credit union to sign mortgage papers feels like facing a simple yes-or-no gate: either the deal’s open or it’s closed. This all-or-nothing moment can ripple into big changes, so knowing what shapes that choice matters a lot. Many don’t realize that behind the scenes, credit scores, interest rates, and […]
Types of Life Insurance in Canada: Which One is Right for You?
Shopping for life insurance in Canada feels like stepping into a maze of confusing words. Terms like participating whole life, term riders, and cash surrender values sound like a secret code that only experts understand. Many people get lost in the jargon and miss out on what really matters: protecting their loved ones and money. […]
Mortgage Insurance vs Life Insurance in Canada: Why the “Easy” Option Could Cost You
Just signed the papers for a new home. The bank manager pushes one more form over: mortgage life insurance. It promises to pay off your house if you pass away, shielding your loved ones. It only takes a few minutes to sign, the cost rolls into your mortgage payment, and that’s it. This tiny step […]
What is a beneficiary in Canada?
A beneficiary is the person, group, or organization picked to get money or assets like life insurance payments, RRSPs, RRIFs, or TFSA balances after death. Choosing a beneficiary lets the money go straight to them, usually quicker and with fewer costs than going through the estate. This helps avoid delays and keeps more cash in […]
Is Life Insurance Taxable in Canada?
Life insurance plays a big role in keeping many Canadian families financially safe. A common question pops up: “Does my family have to pay taxes on the payout?” Most times, the good news is that life insurance money comes without any tax bill. This means the cash reaches loved ones without clearing a tax hurdle, […]
Canada Emergency Benefit Account (CEBA) Update – [January 2021]
Here’s the latest scoop on the Canada Emergency Business Account, or CEBA, as of January 2021. The best part is how easy it is to apply—no jumping through hoops like with programs such as CRB or EI. If you qualify, you could keep up to $20,000 without paying taxes on it, which is a huge […]