Where a Canadian-controlled private corporation (“Corporation A”) pays a dividend to a trust which distributes that amount to a corporate beneficiary (a CCPC) that is connected with the corporate payer and with a s. 104(21) designation being made, should the dividend paid by Corporation A be reported in column D "Taxable dividends paid to connected corporations" or in the total on line 450 for total taxable dividends paid in the taxation year to other than connected corporations? CRA responded:
[A] corporation paying a dividend (the "Payer Corporation") to a trust [is generally expected] to report the dividend in the total in line 450 of Section 3 of Schedule 3 to its T2 for the taxation year in which the dividend is paid, even if the trust designated such dividend, pursuant to subsection 104(19), to one of its corporate beneficiaries to which the Payer Corporation is Connected.