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Corporate Tax Optimization
Capital Dividend Account Maximizer
Half of every capital gain your corporation realizes is already tax-free, log the disposal and see exactly how much just became available to pull out without a personal tax bill.
Reading This Tool
How To Use This Calculator
Enter the disposal, what it sold for, and what it cost, plus any existing CDA balance already on the books.
The non-taxable half of the gain adds straight to the Capital Dividend Account. What comes out the other end is the maximum amount a properly filed capital dividend election could pay to shareholders completely free of personal tax.
Your Inputs
New CDA Balance
-Available For A Tax-Free Capital Dividend
$0
Capital Gain On This Disposal
$0
Non-Taxable Half Added To CDA
$0
Building The CDA Balance
Filing The Election: Form T2054
- Confirm the CDA balance independently, ideally with Schedule 89, before relying on the figure above for an actual filing.
- Have the board pass a resolution authorizing the capital dividend, specifying the exact amount.
- File Form T2054 on or before the day the dividend becomes payable, electing under subsection 83(2).
- Issue the dividend and T5 slips to shareholders for the elected amount.
- Keep a buffer below the calculated balance, an excess election is subject to a 60% Part III penalty tax on the overage.
A simplified illustration of the CDA addition from a single capital disposal. Real CDA balances also reflect prior capital losses, capital dividends already paid, and capital dividends received from other corporations, all of which need to be reconciled before relying on this for an actual election.