| 7 October 2021 APFF Roundtable Q. 1, 2021-0900891C6 F - Tax treatment of employee share trust |
Income Tax Act - Section 248 - Subsection 248(1) - Employee Benefit Plan |
the EBP rather than s. 7 rules applied to a share plan for employees where share distributions were discretionary |
| Income Tax Act - Section 7 - Subsection 7(2) |
s. 7(2) does not deem there to be an agreement to acquire shares |
| 7 October 2021 APFF Roundtable Q. 2, 2021-0900901C6 F - TOSI and scenarios to recuperate the AMT |
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income |
TOSI inapplicable to payment of excessive salary by one spouse’s company to the other spouse |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (d) |
TOSI rules inapplicable to loans to an individual |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (g) - Subparagraph (g)(ii) |
only amount in excess of reasonable return is not an excluded amount |
| 7 October 2021 APFF Roundtable Q. 3, 2021-0900911C6 F - Entreprise exploitée par une fiducie |
Income Tax Act - Section 216 - Subsection 216(1) |
delegation of performance of landlord’s servicing responsibilities does not affect whether its rents are from a business or property |
| 7 October 2021 APFF Roundtable Q. 4, 2021-0900921C6 F - Mind and management et statut de SPCC |
Income Tax Act - Section 245 - Subsection 245(4) |
using a foreign corporation with Canadian CMC to produce a lower tax rate on investment income could be GAARable |
| Income Tax Act - Section 123.3 |
use of foreign corporation with central management and control in Canada to avoid s. 123.3 tax could be GAARable |
| 7 October 2021 APFF Roundtable Q. 5, 2021-0900951C6 F - Safe income and Part IV tax |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
full use can be made of safe income even though there is an immediately subsequent use of Pt. IV tax exclusion |
| Income Tax Act - Section 55 - Subsection 55(2) |
Pt. IV and safe income exclusions under s. 55(2) can be doubled up |
| 7 October 2021 APFF Roundtable Q. 6, 2021-0900961C6 - APFF Q.6 - Minimum Tax Carryover and TOSI |
General Concepts - Transitional Provisions and Policies |
CRA will honour incorrect AMT carryforward balances that arose due to an error in the CRA form |
| Income Tax Act - Section 120.2 - Subsection 120.2(3) - Paragraph 120.2(3)(b) |
CRA will not retroactively adjust returns that relied on a form error permitting TOSI to increase additional tax carryforwards |
| 7 October 2021 APFF Roundtable Q. 7, 2021-0900971C6 F - Economic dependence |
Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) |
financial dependence as described in the jurisprudence is indicative but not dispositive of a non-arm’s length relationship |
| 7 October 2021 APFF Roundtable Q. 8, 2021-0900981C6 F - Cost Recovery Method in IT-426R (Archived) |
Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) |
a limited partnership cannot use a cost recovery earnout |
| 7 October 2021 APFF Roundtable Q. 9, 2021-0901101C6 F - Part IV tax exception vs eligible and non-eligible |
Income Tax Act - Section 55 - Subsection 55(2) |
payment of non-eligible dividend by an Opco with both NERDTOH and ERDTOH to Holdco avoids s. 55(2) if the resulting s. 186(1)(b) tax is not refunded as part of the same series |
| 7 October 2021 APFF Roundtable Q. 10, 2021-0901001C6 - Application of subsection 184(3) and 185.1(3) |
Income Tax Act - Section 185.1 - Subsection 185.1(3) |
concurrence can be given to the election in a share sale agreement before the excessive eligible dividend designation is identified |
| Income Tax Act - Section 184 - Subsection 184(3) |
CRA generally will accept the concurrence by a share vendor to an s. 184(3) election in advance of the excessive eligible dividend being identified |
| 7 October 2021 APFF Roundtable Q. 11, 2021-0901011C6 F - Application of subsection 98(3) |
Income Tax Act - Section 98 - Subsection 98(3) |
s. 98(3) could apply to wind-up of partnership with substantial goodwill |
| Income Tax Act - Section 98 - Subsection 98(5) |
a post-wind up drop down transaction would preclude the application of s. 98(5) |
| 7 October 2021 APFF Roundtable Q. 14, 2021-0901041C6 F - Meaning of Any consideration received by Donee |
Income Tax Act - Section 118.1 - Subsection 118.1(13) - Paragraph 118.1(13)(c) |
“consideration … received” in s. 118.1(13)(c) includes a s. 84(3) deemed dividend |
| 7 October 2021 APFF Roundtable Q. 15, 2021-0901051C6 F - Exemption pour résidence principale |
Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) |
the s. 40(2)(g) formula can be prejudicial where there is delayed home construction on vacant land |
| 7 October 2021 APFF Roundtable Q. 16, 2021-0901061C6 F - 2021 APFF Q.16 - Disclosure of a counter letter |
Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) |
failure to disclose a counter agreement is neglect or carelessness |
| Income Tax Act - Section 116 - Subsection 116(3) |
CRA may be willing to issue a letter confirming that no s. 116 certificate is required because the true vendor is a resident |
| 7 October 2021 APFF Roundtable Q. 17, 2021-0901071C6 - Application of section 120.4 |
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) |
exclusion where business from which the dividend was derived had ceased in a prior year |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Arm's Length Capital - Paragraph (c) |
a capital dividend from a related business was not a source of arm’s length capital |
| 7 October 2021 APFF Roundtable Q. 18, 2021-0901091C6 - TOSI continuity rule for inherited property |
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) |
s. 120.4(1.1)(b)(ii) can apply to shares distributed by inter vivos trust but as directed in will, so that (e)(ii) exclusion can apply |
| Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) - Subparagraph 120.4(1.1)(b)(ii) |
a dividend on shares that were distributed by an inter vivos trust, as directed in a will 15 years previously, can be excluded by s. 120.4(1.1)(b)(ii) |
| 7 October 2021 APFF Roundtable Q. 19, 2021-0901121C6 F - APFF – ITR Remissions |
Income Tax Act - Section 152 - Subsection 152(1) |
rate increase for rulings work |
| 7 October 2021 APFF Roundtable Q. 20, 2021-0910491C6 F - ITRD internal evaluation process |
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