The Income Tax Act (ITA)1 establishes a number of different tax accounts for private corporations to ensure proper integration of taxes with shareholder distributions and to minimize tax avoidance transactions. This CALU Report will discuss some of the more significant tax accounts, how balances are determined, timing issues that can affect the tax treatment of distributions to shareholders and planning opportunities and pitfalls. This article is not intended to provide a comprehensive review but will instead highlight important planning points.

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