TurboTax: Line 120 & Line 127

 

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Relevant Material: "In Canada Revenue Agency (CRA) tax filings, Line 120 and Line 127 are used to report specific types of investment income. In recent tax years, these have been updated to 5-digit codes: Line 12000 and Line 12700. 

Line 120 (Line 12000): Taxable Amount of Dividends 
This line is used to report the taxable amount of dividends from taxable Canadian corporations. 
  • Significance: Canadian dividends are "grossed up," meaning you report more than you actually received. This process accounts for corporate taxes already paid. You then receive a Federal Dividend Tax Credit to prevent double taxation.
  • Reporting: It includes both "eligible" and "other than eligible" dividends, typically found in Box 11 and Box 25 of your T5 Statement of Investment Income. 
Line 127 (Line 12700): Taxable Capital Gains 
This line is used to report taxable capital gains realized when you sell property (like stocks or real estate) for more than its original cost. 
  • Significance: Generally, only 50% of your capital gain is taxable and reported on this line.
  • Capital Losses: If you have capital losses from the current or previous years, they can be used to reduce the amount reported on this line.
  • Calculation: You must first complete Schedule 3, Capital Gains (or Losses) to determine the final amount for Line 12700. 
Summary Table
Feature Line 120 (12000)Line 127 (12700)
Income TypeDividends from Canadian corporationsTaxable capital gains
Key SlipT5, T3, T5013T5008, T3, T5
Tax ImpactTaxed at a preferred rate via a tax creditOnly 50% of the gain is usually taxed.." (Google) 
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