This document discusses the tax benefits of incorporating for realtors. It outlines how incorporation allows for tax deferral through lower corporate tax rates compared to personal tax rates. Incorporation also enables income splitting between family members through dividend payments. Finally, incorporation provides liability protection as corporate assets are separate from personal assets, shielding personal assets from business-related lawsuits. The document provides examples of how to structure compensation, utilize investment vehicles like RRSPs, and engage in tax planning to further reduce taxes.

1. Incorporation for Realtors – Welcome to the Party! Fall 2008

5. Tax Deferral 14.50% 14.50% 14.50% 14.50% Corporate Tax Rate 32.50% 29.95% 22.98% 20.24% Personal Tax Rate Difference Taxable Income 5.74% $35,016 $0 18.00% $75,769 $70,033 15.45% $70,033 $37,886 8.48% $37,885 $35,017

6. Tax Deferral 22.00% 14.50% 36.50% $80,406 $75,770 14.50% 14.50% 14.50% Corporate Tax Rate 43.70% 40.70% 38.29% Personal Tax Rate Difference Taxable Income 23.79% $97,636 $80,407 29.20% and up $123,185 26.20% $123,184 $97,637

8. Taxation of Corporate Investment Income 9.5% 13.34% 22.84% Capital gains 0% 33.33% 33.33% Dividends 19% 26.67% 45.67% Rent 19% 26.67% 45.67% Interest “ Net” Tax Rate Refundable Tax Corporate Tax Rate Investment Income

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