See Also
Bergeron v. The Queen, 2013 DTC 1081 [at 450], 2013 TCC 13
The taxpayer managed a the immigrant investor program at an investment dealer ("Cannacord") and was entitled to receive certain amounts from his...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Contracts | 117 |
Fortino v. R., 97 DTC 55, [1997] 2 CTC 2184 (TCC), briefly aff'd on procedural grounds 2000 DTC 6060 (FCA)
Lump sums received by individual vendors of shares for their execution of non-competition agreements with the share purchaser did not form part of...
Administrative Policy
21 May 2003 Internal T.I. 2003-0001407 F - DISPOSITIONS SUBJECT TO WARRANTY
Where, after selling a property, the vendor settled a claim of the purchaser based on a latent defect in the property with the payment of a lump...
19 January 2015 External T.I. 2013-0511381E5 F - Disposition subject to warranty
An estate pays pursuant to a claim made on a warranty clause in a real estate sale agreement made by the deceased. Can the estate claim a loss...
26 November 2014 External T.I. 2014-0551641E5 F - Winding-up and subsection 42(1)
In accordance with IT-126R2, para. 5(b), a corporation is considered to have "been wound up" on the basis that it has been liquidated and the only...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) | effective time of winding-up not delayed by potential litigation liability | 104 |
| Tax Topics - Income Tax Act - Section 88 - Subsection 88(2) | corporation permitted to claim a s. 42(1)(b) loss after (per IT-126R2) it has been wound up | 140 |
2 October 2014 External T.I. 2013-0513281E5 F - Interaction entre 42(1) et 39(1)c)
An individual after having sold shares of a small business corporation is required to pay $100,000 to the purchaser and incurs related legal...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | s. 42(1)(b)(ii) payments currently do not qualify as BILs | 84 |
22 January 2004 Internal T.I. 2003-0047561I7 F - Effet de la délégation puis de la subrogation
The taxpayer sold an immovable to a purchaser who assumed a mortgage on the property. The purchaser subsequently defaulted, and the mortgagee sold...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(ii) | s. 40(2)(g)(ii) did not apply to a debt claim acquired by subrogation against a defaulted debtor since the claim was interest-bearing | 243 |
25 October 1994 External T.I. 9426485 - HAA 7781-4
When a taxpayer is disposing of the shares of a corporation as well as land and building held personally by him and used in the business of the...
10 September 1991 T.I. (Tax Window, No. 11, p. 15, ¶1512)
S.42 applies to warranties implied or imposed by law.
Articles
Keith R. Hennel, "Escrow Arrangements in Acquisition Agreements: What Are You Creating?", CCH Tax Topics, No. 2176, November 21, 2013, p. 1, at 3
Where an amount of the purchase price is held back by the purchaser to satisfy warranties given by the vendor in relation to the sale of shares,...
Richardson, "Purchase and Sale of a Business: Income Tax Aspects of Warranties, Price Adjustments, and Earn-Outs", 1990 Corporate Management Tax Conference Report, c. 10, pp. 10:3-10:7.
Subsection 42(1)
Paragraph 42(1)(b)
Administrative Policy
30 October 2008 External T.I. 2006-0198381E5 F - Disposition d'un BUP - application de l'article 42
In the year following the disposition of the taxpayer’s principal residence, the taxpayer paid an amount to the purchaser of the property...
28 July 2015 External T.I. 2015-0585431E5 F - Frais juridiques
What is the treatment of legal expenses respecting a hidden defect in a rental property disposed of by the taxpayer? CRA responded:
[T]he legal...