Form RC240

Exploring the RC240 Form

The RC240 form is specifically designed for taxpayers who wish to designate an eligible dividend under subsection 89(14) of the Income Tax Act. The form allows businesses to designate a specific amount of a dividend they pay out as an 'eligible dividend.' The eligible dividends attract a higher personal income tax credit compared to ordinary dividends, ultimately benefiting the taxpayer.

Who are eligible to use FB form RC240?

Form RC240 applies to a wide range of taxpayers including individuals, businesses, and corporate entities that wish to appoint a representative for tax affairs. It extends to trustees, executors, and individuals with power of attorney for a taxpayer.

How to Fill Out Form RC240

Here's a detailed guide on how to fill out the Form RC240 template on the PDFLiner website:

1. Enter the survivor TFSA holder's personal information in Part 1 of the form. This includes the last name, first name, initials, Social Insurance Number (SIN), address, city, province or territory, and postal code.
2. Fill in the deceased TFSA holder’s details in Part 2, similar to Part 1, including the name of the TFSA issuer, the TFSA contract number, and the date of the holder’s death.
3. In Part 3, calculate the amount that may be designated as an exempt contribution. Start by entering the date the survivor payment was received and the amount received. Subtract any previous designations related to this payment to determine the net survivor payment. Then, calculate the lesser amount between the net survivor payment and the FMV of the deceased holder’s TFSA at the time of death.
4. If the deceased holder had an excess TFSA amount, complete Part 4. Enter the FMV of all deceased holder's TFSAs at the date of death that ceased to be a TFSA, the excess TFSA amount and any related income, and total all previous designations related to any of the deceased holder's TFSAs. Subtract these to find the amount that can still be designated.
5. In Part 5, enter the maximum amount that can be designated as an exempt contribution based on the calculations from Part 3 or Part 4. Also, fill in the date the exempt contribution was made, the amount of the exempt contribution, and the survivor TFSA contract number.
6. Sign the certification at the bottom of Part 5 to confirm that all the information provided on the form is correct and complete.

Ensure that you send this filled out form to the TFSA Processing Unit within 30 days after the date the contribution is made. Use the address provided in the form instructions for the correct processing unit based on your location.