CRA confirms that the payment by an LLC of the U.S. tax liability of its indirect Canadian member will give rise to a taxable s. 246(1) benefit

In the face of a spirited submission to the contrary, CRA confirmed its position that the payment by a U.S. limited liability company or its immediate unlimited liability company parent of the US taxes payable by the indirect Canadian member on the LLC income would give rise to a taxable s. 246(1) benefit (if paid by the LLC) or taxable s. 15(1) benefit (if paid by the ULC).

Neal Armstrong. Summary of May 2013 ICAA Roundtable, Q. 22 (reported in April 2014 Member Advisory) under s. 246(1).