9 April 2010 External T.I. 2010-0361381E5 F - Eligible Dividend -- summary under Subsection 89(14)

The "general rate income pool" of Opco (a Canadian-controlled private corporation) at the end of its 2009 taxation year was $100,000 (and exceeded this amount at the end of 2010). On a day in its 2010 taxation year, Opco declared (pursuant to two separate written resolutions) two separate taxable dividends on its shares: Dividend A for $100,000; and Dividend B for $50,000.). The two dividends were paid before year end with one cheque. Opco designated Dividend A as an eligible dividend. CRA stated:

[T]o the extent that Dividend A was a dividend legally distinct from Dividend B and to the extent that Dividend A was designated as an eligible dividend under subsection 89(14), the fact that only one cheque is issued by Opco in respect of the payment of both Dividend A and Dividend B would not prevent Dividend A from qualifying as an "eligible dividend" … .

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