Search - consideration

2007 Ruling 2007-0245281R3- windup of income trust on sale of assets:3rd party-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) assumed debt traceable to capital distribution A corporation ("Bidco") assumes the third-party debt of an income fund (the "Fund") whose units it has acquired as consideration for the subscription for additional units in the Fund, and then had the Fund's assets (principally, limited partnership units of the subsidiary partnership) transferred to Bidco in consideration for a note of Bidco, with the Fund then distributing the note to Bidco in satisfaction of a capital distribution and capital gains distribution declared by the trustees of the Fund. ...

(Tax Window, No. 18, p. 2, ¶1831)-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) Where, in connection with the transfer by Opco to its parent, Holdco, of property subject to debt in excess of the property's ACB, Holdco first assumes the excess debt in consideration for a promissory note of Opco, and then Holdco surrenders that promissory note to Opco in consideration for the redemption of preference shares issued by Holdco to Opco on the transfer, the interest on the assumed debt will be deductible provided that interest on that debt was deductible by Opco and the property is used by Holdco to earn income. ...

14 January 2005 Internal T.I. 2004-009814-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) assumption in consideration for debt forgiveness The interest on debt previously owing by the taxpayer's shareholder that the taxpayer assumed in consideration for the forgiveness of a non-interesting bearing loan that had been owing by it to the shareholder and which had resulted from the transfer, in a prior year, of public shares from the shareholder to the taxpayer was non-deductible given that such assumed debt would not represent borrowed money and the forgiveness of the debt would not result in the acquisition of property. ...

5 January 2012 Ruling Case No. 98811 [broker charge for securing health plan employer]-- summary under Financial Service Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Financial Service broker charge for securing health plan employer A commission charged by a broker to the administrator of a private health services plan in consideration for bringing the administrator and employer together and designing the plan was consideration for a taxable supply. ...

7 September 2000 Ruling 11830-1B (Case 26962)-- summary under Section 138 Summary Under Tax Topics- Excise Tax Act- Section 138 A supply of booth space together with chairs and tables to exhibitors by a registered charity hosting a conference relating to its objects was deemed in light of s. 138 to be a single supply of real estate which was exempt, given "that the provision of the tables and chairs does not materially affect the amount of consideration charged." CRA stated: we consider a supply to be incidental to a particular supply if the supplier's primary objective is to provide the particular supply, and if the consideration would be the same or only marginally different if only the particular supply were made. ...

16 December 2003 Internal T.I. 2003-04616-- summary under Shares Summary Under Tax Topics- General Concepts- Fair Market Value- Shares With respect to the situation where a parent corporation ("Parentco") would elect to have s. 50(1) apply in respect of the shares of one of its wholly-owned subsidiaries ("Lossco") and then, in a subsequent taxation year, Parentco disposes of its Lossco shares in favour of another wholly-owned subsidiary ("Profitco") for a nominal cash consideration, the Agency commented that it would be difficult for Parentco to satisfy the requirements of ss.50(1)(b)(iii)(A) and (C) stating that "the benefits that can be derived from the utilization of non-capital losses should generally be taken into consideration in assigning a value to the shares of a corporation". ...

16 December 2003 Internal T.I. 2003-04616-- summary under Subsection 50(1) Summary Under Tax Topics- Income Tax Act- Section 50- Subsection 50(1) With respect to the situation where a parent corporation ("Parentco") would elect to have s. 50(1) apply in respect of the shares of one of its wholly-owned subsidiaries ("Lossco") and then, in a subsequent taxation year, Parentco disposes of its Lossco shares in favour of another wholly-owned subsidiary ("Profitco") for a nominal cash consideration, the Agency commented that it would be difficult for Parentco to satisfy the requirements of ss.50(1)(b)(iii)(A) and (C) stating that "the benefits that can be derived from the utilization of non-capital losses should generally be taken into consideration in assigning a value to the shares of a corporation". ...

16 October 2012 External T.I. 2012-0439151E5- RRSP strips and prohibited investments-- summary under Registered Plan Strip Summary Under Tax Topics- Income Tax Act- Section 207.01- Subsection 207.01(1)- Registered Plan Strip Respecting an expressed concern that the sale of a prohibited investment by an RRSP or RRIF to the annuitant for fair market value consideration may be viewed as an RRSP strip notwithstanding that the transaction is expressly excluded from the "swap transaction" definition, CRA stated: if a prohibited investment held by an RRSP or RRIF is sold by the RRSP or RRIF to the annuitant of the RRSP or RRIF for cash consideration equal to the fair market value of the prohibited investment, the sale transaction will not be treated as an RRSP strip. ...

23 December 2013 Internal T.I. 2013-0514701I7- Bitcoins-- summary under Subsection 153(1) Summary Under Tax Topics- Excise Tax Act- Section 153- Subsection 153(1) sale for Bitcoins When asked to address the HST/GST consequences of buying and selling goods in exchange for Bitcoins, CRA stated: [W]here a taxable supply… is made and the consideration for that supply is Bitcoins, the consideration for the supply is deemed to be equal to the fair market value of the Bitcoins at the time the supply is made….For example, if a GST/HST registrant sells a good for 10 Bitcoins and the sale is subject to GST/HST, the registrant will be required to collect the GST/HST calculated on the fair market value of the 10 Bitcoins at the time of the sale. ...

CRA stated: The scenario you have described results in an employee disposing of the employee’s rights under a stock option for consideration equal to the stock option’s intrinsic or in-the-money value where the consideration is paid in employer treasury shares. ...