The CRA Form T2054 Election for a Capital Dividend Under Subsection 83(2) of the Canadian Income Tax Act has to be filed by a corporation that elects to pay a tax free capital dividend out of its capital dividend account or CDA. The CRA Form T2054 has to be filed on the day the capital dividend becomes payable and specifies the amount of the dividend declared and the balance in the capital dividend account prior to the declaration of the capital dividend. It has to be accompanied by a certified copy of the director’s resolution declaring the dividend.
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