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Glossary term
Capital Gains Inclusion Rate
The share of a capital gain added to taxable income. In Canada it's 50% — sell an investment at a $10,000 gain and $5,000 is taxed at your marginal rate. Gains inside TFSA/RRSP/FHSA aren't taxed at all. A principal residence is exempt via the PRE.
Related terms
Marginal Tax Rate
The tax rate on your next earned dollar (combined federal + provincial). Canada uses progressive brackets: th…
PRE
Principal Residence Exemption — shelters the capital gain on selling a home that was your principal residence…
CDA
Capital Dividend Account — a notional CCPC account tracking the tax-free half of capital gains (the 50% not i…
Eligible vs Non-Eligible Dividends
Two categories of Canadian dividends with different gross-up and dividend tax credit. Eligible (from public-c…
Tax Integration
A core principle of Canada's tax system: income earned through a corporation and paid to the owner as a divid…
GIC
Guaranteed Investment Certificate — a deposit product with guaranteed return of principal + fixed interest ov…
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