Tax Implications

Tax Implications

Profit sharing and your loan and mortgage interest:

  • the amount you receive is tax free unless the interest paid was claimed as a tax deduction
  • you can contribute the shares to an RRSP Share account and receive a contribution receipt 
  • you contribute the shares to a TFSA Share account

Profit sharing and your RRSP interest:

  • no tax is payable as the Shares will be paid to your RRSP plan and held as Shares in that plan
  • no tax receipt will be issued and your contribution room will not be affected
  • additional Shares can be transferred to this account for which a contribution receipt will be issued, assuming there is contribution room available

Profit sharing and your RRIF interest:

  • no tax is payable as the Shares will be paid to your RRIF and held as Shares in that plan
  • minimum annual payments will be made from your plan and transferred as Shares to a non-registered Share account
  • if you are under 71 years of age, you can transfer these Shares to an RRSP Share account

Profit sharing and your Savings and Term Deposit interest:

  • Shares earned will be paid to a Bonus Share account and treated as interest income for the year in which you received them
  • a tax slip (T5) will be issued in the following year
  • you can contribute the Shares to a Share RRSP account as a deposit and receive an RRSP contribution receipt, assuming there is contribution room available