CRA accepts the streaming of good and bad sources of family trust income to avoid the kiddie tax

The definition of "split income" for kiddie tax purposes includes income of the "kid" that may reasonably be considered to be distributed trust income which is derived from the parents' professional corporation.  Where a family trust rents the 1^st floor of a building to an arm’s length tenant and the 2^nd floor to the parents’ professional corporation, CRA is generally amenable to the kiddie tax being avoided by streaming only the "good" (1^st –floor) trust income to the kid provided the trust deed is appropriately worded.

Neal Armstrong.  Summary of 11 October 2013 APFF Roundtable Q.6, 2013-0495651C6 F under s. 120.4(1) – split income – (c).