41 What are some significant differences for the treatment of Division ‘C’ deductions for individuals and corporations?

Prabpreet Badyal

There are several differences for the treatment of division ‘C’ deductions for individuals and corporation. Some of the major differences are listed in the table below:

 Division ‘C’ Deductions



Lifetime Capital Gain Deduction

  • Capital gains deductions available is the lifetime maximum for the capital gains deduction, less any amounts that have been used in preceding years. ITA 110.6

Lifetime Capital Gain Deduction



  • Individuals receive a credit for donations.
  • ITA 118.1


  • Corporations receive a deduction for a donation under Division ‘C’ rather than receiving a credit.
  • Deduction cannot be greater than 75% of division B income
  • Can be carried forward for 5 years.
  • ITA 110.1(1)


  • Individuals receive a dividends credit for a gross up of 38% for eligible dividends and 15% for non-eligible dividends.
  • ITA 82 and 121


  • From Canadian corporations and foreign affiliates – Division ‘C’ deduction (ITA 112), then dividends are taxed under Part IV of the ITA
  • Other foreign dividends are included in Taxable income and taxed as Passive income.

Loss carryovers

  • Net Capital Loss for individuals and corporations are carried forward indefinitely and carried back 3 years. ITA 111(1)
  • Non-Capital Loss for individuals and corporation are carried forward 20 years and carried back 3 years. ITA 111(5.4)

Refer to ITA 110- 114.2, as well as ITA sections listed above for an in-depth explanation on Division ‘C’ deductions.

Interactive content (Author: Paul Jhajj, January 2020)

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References and Resources:

January 2020


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