Disclosure. I am a licensed Financial Security Advisor, Mutual Fund Representative, and Group Insurance & Annuity Plans Advisor. I am not a lawyer, tax lawyer, or accountant. I discuss taxes only as they relate to specific insurance, investment, and estate strategies; I do not provide general tax optimization or comprehensive financial planning. Content is educational only. Mutual funds offered through WhiteHaven Securities Inc. Insurance products offered through iAssure Inc. Coordinate decisions with your CPA, notary, or lawyer. See Disclaimer and Privacy.
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Corporate Investment Account IRR Calculator
Calculate your true after-tax IRR. See how taxes affect your returns and get a 20-year projection.
Most business owners see account growth but don't know their true after-tax IRR. Taxes paid from your operating account reduce your real return but aren't visible in the investment account balance. This calculator shows your actual performance after accounting for all taxes paid on investment income.
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Account Information
About your calculation period: For meaningful long-term analysis, periods of 10 years or more are most representative. Shorter periods (2-5 years) may not reflect your long-term expected returns, especially given recent market performance.
The account balance at the start of your evaluation period. This should be the balance as of the start date you select below.
The month and year when your evaluation period begins. This should match when your starting balance was recorded.
Format: MM-YYYY (e.g., 01-2020). You can also type month names like "Jan 2020" and it will be converted automatically.
The current account balance (or balance at the end of your evaluation period). This is the balance before accounting for taxes paid.
The month and year when your evaluation period ends (typically today's date for current analysis).
Format: MM-YYYY (e.g., 01-2020). You can also type month names like "Jan 2020" and it will be converted automatically.
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Cash Flows
Recurring Monthly Transactions
Add regular monthly deposits or withdrawals that occurred over a period
One-Time Transactions
Add individual deposits or withdrawals at specific dates
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Taxes Paid on Investment Income
Where to Find This Information
Find the total taxes paid on investment income (capital gains tax, dividend tax, interest tax) on your Federal (T2) and Provincial corporate tax returns for each tax year in your evaluation period. This is the tax paid on investment income, not from the investment account itself, but from your operating account at tax time.
Note: If you don't have this information, you can skip this step and see your pre-tax IRR. However, the after-tax IRR will be more accurate for understanding your true performance.
About RDTOH: Use actual tax paid (not net after RDTOH), as this reflects the cash that left your account and isn't compounding. RDTOH refunds are future cash inflows when dividends are paid. Learn where to find these amounts on your T2 return.
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Calculate Liquidation Tax
Input your current positions to calculate capital gains tax if you were to liquidate today. This helps show your net after-tax return if you sold all holdings.
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Shares/Units
Avg Cost ($)
Current Price ($)
Unrealized Gain
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Verification:
Tax Optimization Strategies
Favor Capital Gains Over Interest
Capital gains are taxed at approximately 25% at the corporate level (50% inclusion rate × 50% corporate rate), while interest income is taxed at ~50%. Over time, this difference compounds significantly. Consider [corporate-class funds](/learn/corporate-class-funds/) that convert interest and dividends to capital gains.
Manage the $50,000 Passive Income Threshold
When passive investment income exceeds $50,000, your small business deduction begins to "grind down." Only 50% of capital gains count toward this threshold, making capital gains strategies even more valuable. Learn more about the [SBD grind](/learn/sbd-grind/).
Consider Tax-Sheltered Alternatives
For long-term wealth transfer, consider corporate-owned life insurance, which provides tax-deferred growth and tax-free distribution through the CDA. This can be especially valuable for estate planning. See our [case studies](/case-studies/) for examples.
Coordinate with Personal Accounts
Your corporate account is one piece of your total wealth picture. Keep interest-generating assets in personal TFSA or RRSP accounts when possible, and use your corporate account for capital gains strategies. Coordinate with RRSP, TFSA, and personal accounts to optimize your overall tax efficiency. Learn about [corporate vs personal investing](/learn/corporate-investing-vs-personal/).
Review Annually with Your CPA
Tax rules change, your situation evolves, and optimization opportunities shift. Review your tax strategy annually with your CPA to ensure you're maximizing tax efficiency while maintaining compliance. See our [tax optimization strategies](/services/tax-optimization/).
Portfolio Optimization Strategies
Structure by Time Horizon
Short-term needs (operating reserves) should be in low-risk, liquid investments. Long-term surplus can be structured for tax efficiency using capital gains strategies. See our [corporate investing guide](/learn/corporate-investing-in-canada/) for a complete framework.
Think Long-Term and Multi-Generation
Corporate investing is about building long-term wealth. Consider how your portfolio structure supports not just your immediate needs, but also estate planning and wealth transfer to the next generation. See our [dynasty approach](/dynasty-builder/).
Work with Your Professional Team
Portfolio optimization requires coordination between your investment advisor, CPA, and lawyer. Ensure your team understands your goals and works together to implement strategies that align with your long-term vision.
Ready to optimize your corporate investment structure?
This content is for information and education only. It explains general concepts that may apply to incorporated business owners, but it is not personalized tax, legal, or investment advice.
Tax Considerations:
Tax rules are complex and subject to change
Strategies and benefits depend on your specific circumstances, province, and business structure
Always consult with a qualified CPA before implementing any tax strategy
Provincial variations in rates and rules may apply (Québec vs. Ontario differences exist)
Past tax treatment does not guarantee future treatment
Investment Risk Disclosure:
Investing involves risk, including the possible loss of principal
There is no guarantee that any investment strategy will achieve its objectives
Investment values fluctuate with market conditions, and you may receive less than you originally invested
Tax efficiency is one factor; risk, fees, and total returns all matter
Past performance does not guarantee future results
Insurance Illustrations:
Insurance illustrations show projected values based on assumptions that may not be guaranteed
Actual results will vary based on factors including interest rates, mortality experience, and expenses
Non-guaranteed elements (such as dividends or credited interest rates) are not promises of future performance
Review both guaranteed and non-guaranteed projections with your advisor before making decisions
Content Accuracy:
We strive to ensure information is accurate and current, but laws and regulations change frequently
Information reflects our understanding at the time of publication and may not reflect subsequent changes
If you believe any content contains an error, please contact us
Regulatory:
Mutual funds are offered through WhiteHaven Securities Inc.
Insurance products and certain other services are provided through iAssure Inc., an independent firm in the insurance of persons and in the group insurance of persons
These activities are neither the business nor the responsibility of WhiteHaven Securities Inc.
Professional Advice:
This article is not a substitute for professional advice from your CPA, lawyer, or financial advisor
Work with your professional team to understand how these concepts apply to your specific situation
For personalized advice, a formal engagement and suitability review are required
