Capital Dividend Account
Also written as cda.
Definition
A notional account tracking the tax-free portion of capital gains realized by a CCPC. Balances can be distributed to Canadian-resident shareholders as tax-free capital dividends.
Long reference
Handbook
Capital Dividend Account (CDA)
Citations, procedures, and worked examples for capital dividend account.
Related terms
CCPC
Canadian-Controlled Private Corporation. A private corporation resident in Canada not controlled by non-residents or public companies. Unlocks the Small Business Deduction.
Eligible dividend
A dividend paid from income taxed at the general corporate rate. Carries a higher gross-up and dividend tax credit than non-eligible dividends.