| 7 June 2019 STEP Roundtable Q. 1, 2019-0798621C6 - STEP 2019 - Q1 - NRT ceasing to be deemed resident |
Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(t) |
a qualifying s. 94(2)(t) sale of Canadian shares effects an immediate commencement of a non-resident year |
| 7 June 2019 STEP Roundtable Q. 2, 2019-0798491C6 - STEP 2019 - Q2 - Alter ego trust and donations |
Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts - Paragraph (c) - Subparagraph (c)(ii) - Clause (c)(ii)(C) |
gifts made by alter ego trust during 3 years following settlor's death |
| Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts |
payments made to registered charity beneficiaries of a trust can be charitable gifts if the payments made are in the discretion of the trustees |
| 7 June 2019 STEP Roundtable Q. 3, 2019-0799901C6 - STEP 2019 – Q3 – TOSI and Hours Worked |
Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) |
falling below 20 hours not presumptive |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business |
husband and wife each contributing 5 hours per week to business could have an excluded business |
| 7 June 2019 STEP Roundtable Q. 4, 2019-0799911C6 - STEP 2019 Q4 - TOSI & Meaning of Excluded Business |
Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) |
spouse on achieving 20-hour threshold could receive large dividends as excluded amounts |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business |
an excluded amount can exceed arm’s length remuneration for the services rendered |
| 7 June 2019 STEP Roundtable Q. 5, 2019-0799961C6 - 2019 STEP - Q5 TOSI and Spouse Age 65+ |
Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(c) - Subparagraph 120.4(1.1)(c)(ii) |
example of the flow-through of the s. 120.4(1.1)(c) excluded amount exclusion through a trust |
| 7 June 2019 STEP Roundtable Q. 6, 2019-0799941C6 - STEP 2019 - Q6a,b TOSI tracing of attributes |
Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) |
a subsequent bequest of Opco shares from the active mother converts previous bequest of shares from the inactive father into good shares for TOSI purposes |
| Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) - Subparagraph 120.4(1.1)(b)(ii) |
successive legatees can rely on the same activity-level of the original testator under s. 120.4(1.1)(b)(ii) |
| 7 June 2019 STEP Roundtable Q. 7, 2019-0798321C6 - STEP 2019 - Q7 - Income Author / Musician |
Income Tax Act - Section 129 - Subsection 129(4) - Income or Loss |
royalty income was incident to composing active business |
| Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business |
royalty income from a music composing business is active business income |
| 7 June 2019 STEP Roundtable Q. 8, 2019-0798481C6 - STEP 2019 - Q8 - Contingency Fees WIP |
Income Tax Act - Section 10 - Subsection 10(4) - Paragraph 10(4)(a) |
contingent fee WIP can have a greater than nil value “in certain circumstances” |
| 7 June 2019 STEP Roundtable Q. 9, 2019-0798631C6 - STEP 2019 - Q9 - Estate immigrating to Canada |
Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate - Paragraph (d) |
a non-resident estate that becomes resident can then become a GRE |
| 7 June 2019 STEP Roundtable Q. 10, 2019-0809651C6 - STEP 2019 – Q10 – Non-resident Estate as GRE |
Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate - Paragraph (c) |
NR estate can provide a temporary tax number of deceased lacking a SIN |
| 7 June 2019 STEP Roundtable Q. 11, 2019-0805771C6 - STEP 2019 - Q11 – Estate as Qualified Disability Trust |
Income Tax Act - 101-110 - Section 104 - Subsection 104(13) |
estate ceases to generate income when it is fully administered |
| Income Tax Act - Section 122 - Subsection 122(3) - qualified disability trust - Paragraph (a) - Subparagraph (a)(i) |
a GRE likely cannot be continued indefinitely as a QDT |
| 7 June 2019 STEP Roundtable Q. 12, 2019-0798301C6 - STEP 2019 – Q12 – Attribution under 75(2) |
Income Tax Regulations - Regulation 204 - Subsection 204(1) |
Satoma has not changed the CRA view that trusts must report income that is attributed to the settlor under s. 75(2) |
| Income Tax Act - Section 75 - Subsection 75(2) |
s. 75(2) attributed income must be reported by trust even though its net income is nil |
| 7 June 2019 STEP Roundtable Q. 13, 2019-0798501C6 - STEP 2019 - Q13 - TOSI and PBE |
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (a) - Subparagraph (a)(i) |
no exclusion for dividend income flowed out to preferred beneficiary |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (c) |
exclusion inapplicable to dividend income flowed through to a preferred beneficiary |
| 7 June 2019 STEP Roundtable Q. 14, 2019-0798511C6 - STEP 2019 - Q14 - TOSI and PBE |
Income Tax Act - 101-110 - Section 104 - Subsection 104(19) |
designation can be avoided by including dividend in "other income" box |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (a) - Subparagraph (a)(i) |
subjecting dividend income paid to a preferred beneficiary to TOSI accords with tax policy – but the designation can be readily avoided |
| 7 June 2019 STEP Roundtable Q. 15, 2019-0798351C6 - STEP 2019 - Q15 - CPP/EI Rulings |
Income Tax Act - Section 5 - Subsection 5(1) |
A CPP/EI status ruling can trigger a payroll audit |
| 7 June 2019 STEP Roundtable Q. 16, 2019-0798461C6 - 2019 STEP Conference Q16 - Passive Income |
Income Tax Act - Section 125 - Subsection 125(5.2) |
recurring ordinary dividends can constitute a transfer of property sufficient to engage s. 125(5.2) |
| 7 June 2019 STEP Roundtable Q. 17, 2019-0798711C6 - STEP 2019 - Q.17 - Part XVIII of the Act |
Income Tax Act - Section 266 - Subsection 266(1) |
the IRS has not followed up re any FATCA information sent to it |
| 7 June 2019 STEP Roundtable Q. 18, 2019-0809731C6 - STEP 2019 - Q18 - Update re DTS |
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