T5 slip (dividend reporting)

A buyer or seller meets the T5 slip when checking how dividends paid by a corporation were reported. The CRA says to use the slip to report the various types of investment income that residents of Canada have to report on their return, and not to use it for investment income paid to non-residents.

How dividends appear

In its guidance on deemed dividends, the CRA says deemed dividends that are eligible dividends, if paid to an individual, go in Box 24, the actual amount, and Box 25, the taxable amount; if paid to a corporation, in Box 24 only. Deemed dividends other than eligible dividends go in Box 10 and Box 11, or Box 10 only for a corporation. The CRA’s line 12000 page lists the T5 among the slips on which dividends are usually reported.

What to ask

• Whether dividends paid before closing were reported on T5 slips.
• Whether the amounts on the slips match the company’s records.
• Whether any payment may be a deemed dividend, which the CRA’s guidance says is also reported on the T5.

See paying a dividend before a sale, the eligible dividend entry and deemed dividend.