A corporation receives dividend and capital gains in T3 and T5 slip but its portfolio management reinvests it, is it taxable?

If the company is a holding company and the only income it has is investment income. The company's year-end is June year-end. All the investment it has is handled by for eg. Investors Group and Investors Group issues the company T slips marking on T slip 2018 as the year.

(a) T slip shows the year 2018 but the year-end of the company is June how would we know the income should we just divide it by half? 

(b)T3 slip has boxes 21(capital gains) $100K and boxes 49(eligible dividends) $80K but the company never received these funds it was actually reinvested back into the portfolio, do we have to disclose these capital gains and dividend income if it was not cashed out? If yes do we disclose it in the same way as we do normally in case of other dividend and capital gains? 


 Your response is much appreciated.

Answer

A mutual fund is a trust for tax purposes.  Therefore, the income that you include in the June year end for your corporation is the income earned in the calendar year that ends in your fiscal year.  For example, for the June 2019 year end, the T3 slips for the year ended December 2018 show the income to be included.  T5 slips just get included for the income earned in the fiscal year so you have to have the investment statements.  And yes, income is income even if it is reinvested.

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