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CRA responded: The definition of reimbursement is consistent with Verdun …, which states “Even when these amounts are…reasonable estimations of the costs…[they are] additional remuneration, not…reimbursement of expenses, which require detailed receipts….” In most cases, the best evidence to show how much was spent is the actual receipt (for example, an invoice). … c. ... CRA responded: Paragraph 2.26 will be revised to better reflect Spence … [where t]he FCA… noted that “costs of the benefit to the employer is the wrong instrument to assess the value of the benefit. …” ...

[T]he [above] treatment … which allows income in the executor’s year to be considered as payable to the beneficiaries (if all of the beneficiaries agree to the treatment) relates only to situations where the estate has not been wound up in the executor’s year such that the estate administration continues beyond the first year. ... Where the income is distributed or made payable to the beneficiaries pursuant to the terms of the Will, the amount must be included in the beneficiaries’ income, unless a valid subsection 104(13.1) or (13.2) designation is made …. ... Further … [such] guidance would also apply where the end of the estate’s tax year coincides with end of the executor’s year ….” ...

., hereafter « Quebec Inc. ») in exchange for shares of two classes in the capital of Quebec Inc.: the first class of shares having a low PUC and an ACB equal to their FMV (the "1971 FMV Shares") and the second class of shares having a high PUC (which was the purpose of the second transaction) and a high ACB equal to their FMV (the "Stripping Shares"). ... The CRA continues of the view that ITA subsection 84(2) should have applied in this case especially by reason of … MacDonald …. ... In short, in a situation such as in the Descarries case, the three avoidance transactions are…an abuse of the Integration Rules. … We also are concerned by the specificity of the principle proposed by the TCC to the effect that in carrying out the three avoidance operations, subsection 84.1(1) could be utilized to distribute surplus of a corporation in the form of a capital gain to the extent that that the capital gain was not reduced y a capital loss which was sustained from the disposition of shares whose ACB is derived from the FMV of those shares on Valuation Day…. ...

7 October 2011 Roundtable, 2011-0412161C6 F- Timing of the increase in interest- stock option-- summary under Subparagraph 55(3)(a)(ii) Summary Under Tax Topics- Income Tax Act- Section 55- Subsection 55(3)- Paragraph 55(3)(a)- Subparagraph 55(3)(a)(ii) grant of in-the-money options to key employee as part of same series could be a significant increase in interest – which otherwise occurs on exercise Mr. ... Instead it references the holding of an economic interest in the corporation. … A stock option often has conditions that make the exercise of the option uncertain and contingent. ... However … an increase in an interest in the corporation occurs when the stock option is granted rather than when the option is exercised … in a situation such as that described, where a key employee, instead of an immediate receipt of shares in the corporation, receives a stock option with characteristics and price such that there is no real uncertainty or contingency as to the exercise of the stock option. ...

Regarding Q.3.1, CRA stated: Taxpayer and Purchaser Corporation would not be deemed by paragraph 84.1(2)(e) … to be dealing at arm’s length. ... Regarding Q.3.2, CRA stated: Taxpayer and Purchaser Corporation would not be deemed by paragraph 84.1(2)(e) … to be dealing at arm’s length. However, Taxpayer would be deemed, for the purposes of section 84.1 …, to have disposed of the Subject Shares to the person who acquired them from Purchaser Corporation (himself). … [W]e are prepared to apply this provision such that, if Taxpayer had disposed of the Subject Shares directly to the subsequent purchaser and section 84.1 … would not have applied to that disposition, the First Disposition will not be subject to section 84.1 …. ...

Under Article 948 of the Civil Code of Québec … [a]n owner of an immovable (for example, a piece of land) is the owner by accession to all structures and works located on the immovable. This position also applies to the term "property" used in the definition of "interest in a family farm or family fishing partnership" under subsection 110.6(1). … [W]ith respect to the determination of whether or not property was used principally [over 50%] in the carrying on of a farming business … IT-373R2 [para. 18] states: …Whether or not particular assets are "used principally in the business of farming" is a question of fact to be determined on a property by property basis …. ...

., a corporation that generated rents that, given the level of activity, constituted income from property) cannot qualify as excluded shares, whereas Examples 10 of CRA’s “ Guidance on the application of the split income rules for adults ” found that dividends received by siblings (now, over 25) following a sale of one of Real Estateco’s rental properties at a gain were from excluded shares, and Example 12 found that Spouse A, aged 65 who owned 95% of the shares of Investco, whose active business was actively managed by Spouse A (with no involvement of Spouse B) before it became a portfolio company, held that 95% bloc as excluded shares. When asked to reconcile Q.7 with the latter two examples, CRA stated: Example 10 was intended to illustrate the exclusions with respect to reasonable return … and excluded shares. As for Example 12, the latter also covered the exception for excluded shares, but also the deeming rule provided in subparagraph 120.4(1.1)(c)(i) providing relief for spouses of business owners who turned 64 before the end of the year. … In addition, to demonstrate that the various exclusions were applicable not only to entities that earn income from an active business, such as a manufacturing corporation, but also to entities that carry on a business of earning income from property, such as a property rental business (in Example 10) or an investment management business (in Example 12), we had assumed that these corporations had a sufficient level of activity such that their income could be considered as derived from a business. ...

17 May 2022 IFA Roundtable Q. 14, 2022-0926441C6- Partnership and Subsection 90(3)Election-- summary under Subsection 90(4) Summary Under Tax Topics- Income Tax Act- Section 90- Subsection 90(4) proposition applied (regarding a s. 90(3) PUC distribution election) that a partnership cannot be a related person A limited partnership (LP)- whose 90% general partner is FA1 (held by Canco1) and whose 10% limited partner is FA2 (held by Canco2, which is related to Canco1) – receives a paid-up capital distribution (the “Distribution”) from its wholly-owned subsidiary (FA3). ... CRA responded: [A] subsection 90(3) election in respect of the Distribution will be valid if made only by FA1 in its capacity of the general partner on behalf of LP because there is no “connected person or partnership” in respect of LP within the meaning of subsection 90(4). … The election has to be made by FA1 by notifying the Minister in writing on or before the filing-due date of FA2 for its taxation year ended on December 31, 2021. After discussing the manner of making the election (by letter with various relevant particulars), CRA noted: If a joint election is made by LP, Canco1 and Canco2, CRA would accept it as valid and would accept the required election made by FA1 on behalf of LP, Canco1 and Canco2 provided such election letter includes all the required information as outlined [above]. … If an election is made jointly by Canco1, Canco2 and LP in respect of the Distribution, it is required to be made on or before the earliest of the filing-due dates of Canco1, Canco2, FA1 and FA2 for their respective taxation years that include December 31, 2021, in accordance with [Reg.] 5911(6)(b) …. ...

7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 2, 2021-0895981C6 F- Don d’une partie d’un intérêt dans une police d’assurance-vie en faveur d’un organisme de bienfaisance enregistré-- summary under Disposition Summary Under Tax Topics- Income Tax Act- Section 148- Subsection 148(9)- Disposition implementing a life insurance interest sharing strategy may entail the entire policy’s disposition and uncertainties as to what interest is disposed of An individual owning a policy on that individual’s life with coverage of $1 million, a cash surrender value (“CSV”) of $250,000 and an adjusted cost basis ("ACB") of $150,000, donates ½ of the individual’s interest in the policy to a registered charity or, alternatively, only donates ½ of the entitlement to the CSV. ... CRA responded: [T]he donor will wish to ensure that a new policy is not created and that the portion of the policy the individual wishes to donate has been fully assigned in order to qualify for a donation tax credit. … … [I]t would be necessary to determine, i nter alia, whether the gift of a portion of the policy can be made without resulting, for the purposes of the applicable private law, in a disposition of the entire interest in the policy rather than just a portion of it. ...

CRA stated: [W]e will generally accept that tax paid to a foreign country will be an income or profits tax notwithstanding that it is computed by reference to gross revenue if the tax is part of a comprehensive income tax regime and is tightly linked and subordinate to a tax that is computed by reference to income or profits….The following factors would be considered indicative…: * a single tax statute contains the option to pay tax on gross income or tax on net income; * there is the ability to elect annually between the two taxation regimes; and * the rate of tax applied on net income is not unreasonably high. ...