Here are our full-text translations of the 2019 APFF Roundtable

5 March 2020 - 12:06am
Email this ContentEmail this Content

Today, CRA published in final form its responses to the questions posed at the October 2019 (regular) APFF Roundtable. Although these responses have already been summarized by us, for your convenience the following table lists and links these questions and responses and our summaries of the responses, and provides brief descriptors.

In October, we provided translations of the full text of the answers, and provided brief summaries of the questions posed. Now you have full-text translations of the questions as well. We have not noticed any changes in the final answers. (There was a clarification to the wording the question posed in Q.9(b).)

However, at the Roundtable, CRA did not answer Questions 4, 7 and 14, which we have not included below as they are still pending.

Topic Descriptor
11 October 2019 APFF Roundtable Q. 1, 2019-0819401C6 F - Interaction between par. 84.1(1)(b) and 129(1(a) Income Tax Act - Section 129 - Subsection 129(1) reversal of position that s. 84.1(1)(b) dividends do not generate dividend refunds
Income Tax Act - Section 84.1 - Subsection 84.1(1) - Paragraph 84.1(1)(b) s. 84.1 dividend can generate dividend refund
11 October 2019 APFF Roundtable Q. 2, 2019-0812611C6 F - Résiliation d'un bail - Lease cancellation Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(z) s. 20(1)(z) applies notwithstanding s. 18(1)(a) but is subject to source rule in s. 20(1) preamble
Income Tax Act - Section 20 - Subsection 20(1) s. 20(1)-preamble source rule applied
Income Tax Act - Section 54 - Principal Residence lease termination payment received by tenant was eligible for principal residence exemption
Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(b) lease termination payment received by tenant was referable to complete period of holding of (annually renewed) leasehold interest
11 October 2019 APFF Roundtable Q. 3, 2019-0812621C6 F - Changement d’usage-impact sur l’exemption pour résidence principale Income Tax Act - Section 43 - Subsection 43(1) allocation of ACB between units in a duplex
Income Tax Act - Section 45 - Subsection 45(3) method for making s. 45(3) election where conersion of duplex
Income Tax Act - Section 54 - Principal Residence - Paragraph (c) reporting of principal residence exemption when the residence had been expanded from 1 to 2 duplex units
11 October 2019 APFF Roundtable Q. 5, 2019-0812641C6 F - Professional fees incurred in the context of a litigation with CRA Income Tax Act - Section 60 - Paragraph 60(o) - Subparagraph 60(o)(i) s. 60(o)(i) generates professional fee deductibility from the moment that CRA informs that there is an audit
11 October 2019 APFF Roundtable Q. 6, 2019-0812651C6 F - CDA and wind-up of a subsidiary Income Tax Act - Section 88 - Subsection 88(1) IT-126R2 applied re tiiming of addition of the wound-up subsidiary’s CDA
Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(z.1) IT-126R2 applicable in determining when CDA of sub is added to parent’s CDA
11 October 2019 APFF Roundtable Q. 8, 2019-0821311C6 F - APFF 2019 Q.8: Surplus Documentation Income Tax Act - Section 230 - Subsection 230(1) taxpayer must prepare adequate records to support surplus computations
Income Tax Regulations - Regulation 5901 - Subsection 5901(2) - Paragraph 5901(2)(b) failure to prepare surplus accounts will preclude a late-filed Reg. 5901(2)(b) election
11 October 2019 APFF Roundtable Q. 9, 2019-0812781C6 F - Acquisition of control and trusts Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(i) - Subparagraph 256(7)(i)(ii) discretion of a spousal trust’s trustees to encroach on capital in favour of the spouse likely offends s. 256(7)(i)(ii)
11 October 2019 APFF Roundtable Q. 10, 2019-0812691C6 - Consolidated safe income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) negative safe income of a subsidiary need not reduce the SIOH of the parents’ shares
11 October 2019 APFF Roundtable Q. 11, 2019-0812701C6 F - Paragraph 251(5)(b) and convertible debenture Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) debenture with a contingent conversion right and non-participating conversion ratio entailed loss of CCPC status
11 October 2019 APFF Roundtable Q. 12, 2019-0812711C6 - Part IV Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) two 50% shareholders of two corporations likely acting in concert to produce connectedness
Income Tax Act - Section 186 - Subsection 186(2) two 50% shareholders of two corporations likely acting in concert to produce connectedness
11 October 2019 APFF Roundtable Q. 13, 2019-0812721C6 F - Late-Filed CDA Election Income Tax Act - Section 83 - Subsection 83(3) directors can authorize a late capital dividend election after the dividend declaration
11 October 2019 APFF Roundtable Q. 15, 2019-0812741C6 F - TOSI and interest income earned by a trust Income Tax Act - 101-110 - Section 108 - Subsection 108(5) - Paragraph 108(5)(a) source character of trust income maintained in the absence of s. 108(5)(a) appplication
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (d)(i) beneficiaries of a family trust can benefit from the excluded debt exception from the TOSI rules
11 October 2019 APFF Roundtable Q. 16, 2019-0812751C6 F - 74.4(2) and 120.4 interaction Income Tax Act - Section 74.4 - Subsection 74.4(2) main purpose test can still apply even where designated persons are subject to TOSI
Income Tax Act - Section 74.4 - Subsection 74.4(2) - Paragraph 74.4(2)(g) only s. 74.4(2)(g) provides relief from the joint application of the TOSI and s. 74.4(2) rules
11 October 2019 APFF Roundtable Q. 17, 2019-0812761C6 F - Entreprise - Business Income Tax Act - Section 248 - Subsection 248(1) - Business Stewart as the leading case on “business”
11 October 2019 APFF Roundtable Q. 18, 2019-0812771C6 F - TOSI Actively Engaged Income Tax Act - Section 120.4 - Subsection 120.4(1) - Reasonable Return potential application of reasonable return exception where on mat leave or disability
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business - Paragraph (a) loss of excluded business exception when specified individual went on extended mat leave or disability
11 October 2019 APFF Roundtable Q. 19, 2019-0825031C6 F - Service téléphonique réservé