Ontario Barrister and Solicitor Practice Exam

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How much income must a Canadian shareholder report on a $200 dividend?

$200
$276
$238
$215

The correct answer is: $238

The amount of income that a Canadian shareholder must report on a $200 dividend depends on their personal tax situation. While a shareholder may in theory receive the full $200 in cash, they may have to pay taxes on it. The $200 dividend could actually be taken from a different source, such as the corporation's retained earnings, and may be subject to different tax rates. This means that the actual amount of taxable income could be different than the $200 received as a dividend. However, out of the options presented, $238 is the closest to the possible amount of income a shareholder may have to report on a $200 dividend. The other options are either too low or too high and do not accurately reflect the potential tax liabilities of receiving a $200 dividend.