Income Trust Tax Return Services

Offering Income Tax Return Services in Toronto & North York

An income trust is an investment that may hold equities, debt instruments, royalty interests or real properties. The main attraction of income trusts is their stated goal of paying out consistent cash flow for investors, which some investors prefer. In a typical income trust structure, the income paid to an income trust by the operating entity in the form of interest, royalty or lease payments, is deductible in computing the operating entity’s income for tax purposes. These deductions can reduce the operating entity’s tax to nil. The trust in turn, "flows" all of its income received from the operating entity out to unit holders. The distributions paid or payable to unit holders reduces a trust's taxable income, so the net result is that a trust would also pay little to no income tax. The net effect is that the interest, royalty or lease payments are taxed at the unit holder level. ¹ For more detail on how SSM & S Professional Corp can help you please contact us.
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