| 7 October 2022 APFF Roundtable Q. 1, 2022-0942081C6 F - Safe Income |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
contingent liabilities that reduce shares’ FMV should also reduce safe income on hand |
| 7 October 2022 APFF Roundtable Q. 2, 2022-0942091C6 F - Taxable preferred shares and shareholders’ agreement |
Income Tax Act - Section 248 - Subsection 248(1) - Taxable Preferred Share - Paragraph (f) - Subparagraph (f)(ii) |
whether a right to a top-up in the event of an IPO is inconsistent with receiving FMV proceeds |
| 7 October 2022 APFF Roundtable Q. 3, 2022-0942121C6 F - THRP- PRTA – Versement de dividendes imposables |
Income Tax Act - Section 125.7 - Subsection 125.7(2.01) |
parent could pay a dividend in, say, Period 27, without adverse CEWS impact on Canadian sub |
| Income Tax Act - Section 125.7 - Subsection 125.7(14.1) |
there is no adverse CEWS impact of a non-resident parent paying dividends to individuals |
| 7 October 2022 APFF Roundtable Q. 4, 2022-0942131C6 F |
Income Tax Regulations - Regulation 1101 - Subsection 1101(5b.1) |
CRA is willing to adapt a prescribed requirement, that an election be made by letter attached to the return, to internet filings |
| 7 October 2022 APFF Roundtable Q. 5, 2022-0947611C6 F - Limited Partnership and Loans |
Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(c) - Subparagraph 53(2)(c)(v) |
guarded acceptance of distributions of LP profits as loans, followed by set-off against draws in January |
| Income Tax Act - Section 40 - Subsection 40(3.1) |
loans made only to avoid s. 40(3.1) gains due to income gains not being added to ACB until next year, may be acceptable |
| 7 October 2022 APFF Roundtable Q. 6, 2022-0942141C6 F - Rollover under 70(6) and gifts to charities |
Income Tax Act - Section 70 - Subsection 70(6) - Paragraph 70(6)(b) - Subparagraph 70(6)(b)(ii) |
charitable gifts by a spousal trust will disqualify it |
| 7 October 2022 APFF Roundtable Q. 7, 2022-0942731C6 F - Permanent establishment and teleworking |
Treaties - Income Tax Conventions - Article 5 |
having an employee, with general authority to contract, telework from his cottage in another province does not necessarily create an employer PE there |
| Income Tax Regulations - Regulation 102 - Subsection 102(1) |
Reg. 400(2)(b) PE is not necessarily an employer establishment to which the employee reports to work |
| Income Tax Regulations - Regulation 400 - Subsection 400(2) - Paragraph 400(2)(b) |
employer is required to be carrying on business through an employee’s cottage to be considered to have a PE there under Reg. 400(2)(b) |
| 7 October 2022 APFF Roundtable Q. 8, 2022-0942151C6 F - Surplus stripping |
Income Tax Act - Section 245 - Subsection 245(2) |
permissible use of sale through subsidiary to avoid s. 84.1 |
| Income Tax Act - Section 256 - Subsection 256(5.11) |
range of factors considered |
| Income Tax Act - Section 84.1 - Subsection 84.1(1) |
incorporating a sub through which a share sale will occur so as to avoid s. 84.1 is not per se GAARable |
| 7 October 2022 APFF Roundtable Q. 9, 2022-0942281C6 F - Section 80 - proposals under BIA |
Income Tax Act - Section 80 - Subsection 80(2) - Paragraph 80(2)(a) |
forgiveness under a Bankruptcy proposal occurred when it was court-approved |
| Income Tax Act - Section 80 - Subsection 80(13) |
s. 80(13) tax liability does not arise until the forgiveness |
| 7 October 2022 APFF Roundtable Q. 10, 2022-0942161C6 F - Règles particulières sur les changements d’usage |
Income Tax Act - Section 45 - Subsection 45(2) |
where s. 45(2) election is made on change to rental use, no change of use when the property changes back to actual personal use |
| Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(c) |
no change in the regular use under s. 45(1)(c) where a property regularly alternates between personal and rental use |
| 7 October 2022 APFF Roundtable Q. 11, 2022-0942751C6 F - Changement de fin d'exercice et opposition |
Income Tax Act - Section 165 - Subsection 165(3) |
CRA will not vacate an assessment that was not invalid or unfounded |
| Income Tax Act - Section 249.1 - Subsection 249.1(7) |
a corporation cannot change its year end by objecting to the 1st year’s initial assessment |
| 7 October 2022 APFF Roundtable Q. 12, 2022-0950691C6 F - Revenu de location - DPE |
Income Tax Act - Section 248 - Subsection 248(1) - Property |
building treated as a single property for purposes of principal use test |
| Income Tax Act - Section 129 - Subsection 129(4) - Income or Loss |
rental income from the smaller portion of a building not used in manufacturing could be assimilated to active business income |
| 7 October 2022 APFF Roundtable Q. 13, 2022-0942181C6 F - Transfer of an RRSP at death |
Income Tax Act - Section 248 - Subsection 248(23.1) - Paragraph 248(23.1)(a) |
s. 248(23.1)(a) does not deem the amount paid to be received as beneficiary of the estate as per s. 146(8.1) |
| Income Tax Act - Section 146 - Subsection 146(8.1) |
an amount paid by an estate of the deceased’s RRSP to satisfy the claim of his separated surviving spouse did not qualify as a refund of premiums |
| 7 October 2022 APFF Roundtable Q. 14, 2022-0942191C6 F - Safe-income determination time |
Income Tax Act - Section 248 - Subsection 248(10) |
safe income arising on a sale and after the safe-income determination time could be used for subsequent dividends not paid as part of the same series |
| Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) |
no need for CRA flexibility regarding safe income issues arising from early formation of a Buyco |
| Income Tax Act - Section 55 - Subsection 55(1) - Safe Income Determination Time |
incorporation of Buyco may trigger safe-income determination time |
| 7 October 2022 APFF Roundtable Q. 15, 2022-0942241C6 F - Safe income inclusion of dividend tax refund |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
taxes reduce safe income attributable to realized taxable capital gain net of the refundable tax generated from dividend |
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