The CRA accepts that, if refundable tax contributes to the gain on a share immediately before its disposition, it can also contribute to the safe income of the share. In the example, a corporation with a December 31 year-end, sells assets on November 30, realizes a gain, on which tax net of RDTOH will be paid, and then pays a dividend on December 1. The idea seems to be that the tax payable on the gain must be subtracted from the safe income available on December 1, but the tax should be calculated to be net of the associated refundable tax.
Question 15, 2022 CTF Conference Roundtable, summarized in Tax Topics no. 2658 (February 14, 2023)
