Income Tax Severed Letters - 2023-04-05

Ruling

2023 Ruling 2020-0862441R3 - Charitable donation by Estate

Unedited CRA Tags
84(2), 118.1(5.1)(b)
cash extracted from an estate subsidiary can be rendered substituted property for s. 118.1(5.1)(b) purposes by having such cash paid as redemption proceeds
cash received as redemption proceeds for pref paid as stock dividend on shares was substituted property

Principal Issues: 1. Does subsection 84(2) apply to deem a taxable dividend to be paid on the payment of the shareholder loan account to the Estate? 2. Will the cash donation by the Estate to the Qualified Donee be considered to be a gift of property that was acquired by the Estate on and as a consequence of the death of the Deceased, or property that was substituted for that property?

2021 Ruling 2020-0847671R3 F - Transfert d'un immeuble

Unedited CRA Tags
39(1), 15(1) ou 246(1)
no s. 15(1) benefit on property transfer to shareholders for its nominal appraised FMV if indeed such FMV was suppressed by the low-rent long-term leases to the shareholders
no demurral re a property’s FMV being suppressed by long-term leases with nil net rents
CBCA corporation which leased its property rent-free to its shareholders presented to CRA as an NPO

Principales Questions: 1. Quelles sont les conséquences fiscales pour une société résultant du transfert d’un immeuble qu’elle possède en faveur de ses actionnaires détenteurs des droits d’occupation de cet immeuble? What are the tax consequences for a corporation resulting from the transfer of a building in favor of its shareholders who hold the rights to occupy this building?
2. Y a-t-il des avantages fiscaux conférés aux actionnaires lors du transfert de l’immeuble? Are there any tax benefit conferred on shareholders when the building is transferred?

Position Adoptée: 1. La transaction sera considérée comme une transaction de nature capitale et le gain en capital qui en découlerait, s’il y avait lieu, serait fonction du produit de disposition . Cette transaction ne devrait pas résulter en une perte en capital./The transaction will be considered of a capital nature and the capital gain if any, will depend on the proceeds of disposition. This transaction should not result in a capital loss.
2. Le montant de l’avantage en vertu des paragraphes 15(1) et 246(1) sera fonction de la contrepartie versée pour ce transfert./The amount of the benefit under subsections 15(1) and 246(1) will depend on the consideration paid for that transfer.

Raisons: Conformément aux dispositions de la Loi et positions antérieures/In accordance with the provisions of the Act and previous positions.

Technical Interpretation - External

4 January 2022 External T.I. 2015-0607531E5 F - Action admissible de petite entreprise

Unedited CRA Tags
110.6(1); 110.6(14)(f)

Principales Questions: Est-ce que des actions peuvent se qualifier à titre d'actions admissible de petite entreprise dans une situation où elles remplacent des actions suite à un roulement 85(1) et une fusion ? / Whether shares are qualified small business corporation shares in a particular situation involving substitution of shares by way of a rollover pursuant to subsection 85(1) and an amalgamation.

Position Adoptée: Aucune conclusion définitive en ce qui a trait à la situation spécifique décrite / No definitive conclusion with regards to the particular described situation.

Raisons: commentaire généraux émis sur les effets du sous-alinéa 110.6(14)(f)(i) et sur la définition d'action admissible de petite entreprise énoncée au paragraphe 110.6(1) de la Loi./ General comments on subparagraph 110.6(14)(f)(i) and on the subsection 110.6(1) definition of qualified small business corporation share.