Tim Barrett, Kevin Duxbury, "Corporate Integration: Outbound Structuring in the United States After Tax Reform", 2018 Conference Report (Canadian Tax Foundation), 18:1-76

Summary Under
Tax Topics - Income Tax Act - Section 113 - Subsection 113(1) - Paragraph 113(1)(c)

FAPI inclusion if US tax rate on FAPI is only 21% - but potential s. 113(1)(c) deduction against other income on distribution (p. 18:11)

[T]he...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(11)

Timing mismatches if an LLC distributes only a portion of its profits (pp. 18:23–25)

Timing mismatches can arise if an LLC distributes only a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12)

High effective tax rate if LLC does not distribute its earnings currently (pp. 18:24-25)

[T]o the extent that the US tax [of an LLC] is not used...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Net Earnings

No reduction of net earnings of LLC for US taxes paid by corporate member (p. 18:24)

[B]ecause an LLC is not liable to tax in the United States,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(4)

LLC-related FAT issues (pp. 18:24–25)

US tax paid by a Canadian member on an LLC’s income is not FAT for the purposes of subsection...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(5)

Current s. 91(5) deduction for FAPI included in individual LLC member’s income as the dividend payment (p. 18:27)

When an LLC pays a dividend to...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (a) - Subparagraph (a)(i)

Double-taxation of FAPI where TOSI rules apply (p. 18:31)

[T]he TOSI rules do not interact well with FAPI. On the one hand, FAPI included in a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 129 - Subsection 129(4) - Non-Eligible Refundable Dividend Tax on Hand

Addition of FAPI to Non-Eligible Refundable Dividend Tax on Hand in limited circumstances, and generating refund of such NERDTOH (p. 18:32)

FAPI...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 125 - Subsection 125(5.1)

Double-counting of adjusted aggregate investment income (AAII) of CFA twice towards passive income restriction in s. 125(5.1)(b) (p. 18:32)

[A]n...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 129 - Subsection 129(1)

Deferral where use of CFA of CCPC to earn aggregate investment income (AII) (pp. 18:29–30)

[T]he reduction of the US federal corporate rate to...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.