Marcus Lalonde Received $1,835

Multiple Choice

Marcus Lalonde received $1,835.00 in cash dividends from Canadian corporations whose shares are in his personal portfolio. Marcus faces a problem of double taxation because

A) The tax rate on passive income such as dividends is twice as high as on income from employment.
B) He is liable for income taxes on these dividends. However, the cash represents income from corporations which have already paid income tax on those earnings
C) He is liable for the income tax on these dividends and may be liable for capital gains tax upon sale of the shares that produced the dividends
D) The tax treatment on dividends is similar to withdrawals from RRSP's. A portion of the dividend is withheld by Revenue Canada upon the issue of the dividends and the portion that is taken into income is taxed
E) He will be taxed on the dividends taken into income this year and will be taxed for the total amount of dividends he has received while holding the shares upon the sale of shares