Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
CANADIAN TAX FOUNDATION NOVEMBER 1992 ROUND TABLE
Question # 75
Subject: Deemed interest income - small business corporation
Subsection 74.4(2) provides that in certain circumstances where an individual has transferred property to a corporation, the individual shall be deemed to receive interest each year on the outstanding amount of the transferred property.
Paragraph 74.4(2)(c) states that this provision only applies where the corporation was not a small business corporation. Thus, if the corporation is a small business corporation, the deemed interest income rules will not apply.
To meet the exception in paragraph 74.4(2)(c), is the corporation required to be a small business corporation at the time of the transfer only, or both at the time of the transfer and at all future times?
ANSWER
The exemption offered to small business corporations in subsection 74.4(2) is only available for the period throughout which the corporation was a small business corporation as defined in subsection 248(1).
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1992
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1992
Email this Content