Yeah, this is standard for a redemption. The difference between the Paid Up Capital ($25) and the redemption price ($26), is a deemed taxable dividend.bpither wrote:I think the note means that any redeemable amount above $25 will be considered a dividend and eligible for the dividend income credit?
So, for tax purposes you'll get $25 (less your ACB as a capital gain) and $1 (plus the final dividend amount) as a taxable dividend.
It's always wise to look at your own tax bracket and decide if you would rather all capital gains or capital gain plus the dollar dividend. It may provoke you to sell the shares before redemption (hopefully as close to $26 as possible) so that the entire amount (at market) will be capital gain.
ltr