Search - consideration

For purposes of this letter, we assume that no non-share consideration is taken back on such a transfer. ... Where common share consideration only is used, a valuation of the transferred property and of the corporation would be required in order to determine the appropriate number of common shares to be issued. ... Although paragraph 85(1)(e.2) of the Act may favour the use of preferred share consideration, it certainly does not mandate such use in all cases. ...

If the transfer property was acquired before January 1, 1972, the consideration should equal the V-Day value of the transfer property. ... Is the assumption of a liability on purchase of livestock inventory included in non-share consideration? ... A taxpayer has a prior year restricted farm loss carry-forward and, using a subsection 85(1) election, he takes back a promissory note as non-share consideration equal to the losses. ...

The amount of non-share consideration received by the taxpayer is a matter of fact and not an elected amount. The matters agreed to under a roll-over election are the proceeds and cost of eligible properties transferred and not the amount of non-share consideration received or paid in exchange. We note that the taxpayer is not required to file an amended election to revise the stated amount of non-share consideration received as this adjustment is automatic. ...

Consequently, the non-share consideration received in respect of the land will not exceed the tax cost of the land and the non-share consideration received in respect of the building will not exceed the tax cost of the building. ... The promissory note issued as consideration for the land will not exceed the ACB of the land and the promissory note issued as consideration for the building will not exceed the UCC of the building. ... Consequently, the non-share consideration in respect of the XXXXXXXXXX land will not exceed the tax cost of the land and the non-share consideration in respect of the XXXXXXXXXX building will not exceed the tax cost of the building. ...

You have asked us whether the Consideration would be assistance as defined in subsection 125.4(1) of the Income Tax Act (the "Act"). ... The financing of the Production is comprised of several components, including the $XXXXXXXXXX Consideration from the GoC. The Producer has received the first $XXXXXXXXXX instalment in respect of the Consideration. ...

PRINCIPAL ISSUE: Whether the income tax payable by the annuitant of a spousal RRSP constitute consideration for the purpose of paragraph 160(1) of the Act. ... It is our view that the income tax liability created by the taxation of a spousal RRSP withdrawal does not represent a consideration given by the spouse for the property transferred but constitutes an obligation of the annuitant pursuant to the Act. Consequently, such an amount is not consideration for the purpose of section 160 of the Act because it is not value given by the spousal annuitant. ...

Bryson 957-2110   File No. 7-4757 SUBJECT:   Subsection  15(1) of the Act Transfer of property to a wholly-owned Canadian subsidiary We are writing in response to your letter of February 22, 1990 in which you requested our interpretation of the application of subsection 15(1) of the Income Tax Act (the "Act") to the following situation. (1)     A Corporation transfers property to its wholly-owned Canadian subsidiary. (2)     The Corporation and its wholly-owned subsidiary jointly elect under subsection 85(1) of the Act. (3)     The consideration for the transfer is to be a common share of the wholly-owned subsidiary and non-share consideration equal to the adjusted cost base of the property transferred. (4)     The value of the share is issued to the parent on the exchange exceeds the difference between the fair market value of the transferred property and the boot received on the exchange. (5)     There is only one class of shares issued by the wholly-owned subsidiary, there are no V-day value considerations and the transaction is not tax motivated. As stated in IT-432R and IT-291R it is the Department's position that where a shareholder transfers property to a corporation, the consideration and the fair market value of the share issued.  If the fair market value of the total consideration received exceeds the fair market value of the property transferred, the excess is included in the income of the shareholder pursuant to subsection 15(1) of the Act.  ...

Bryson FILE 7-4757 SUBJECT: Subsection 15(1) of the Act Transfer of property to a wholly-owned Canadian subsidiary We are writing in response to your letter of February 22, 1990 in which you requested our interpretation of the application of subsection 15(1) of the Income Tax Act (the “Act”) to the following situation. (1) A Corporation transfers property to its wholly-owned Canadian subsidiary. (2) The Corporation and its wholly-owned subsidiary jointly elect under subsection 85(1) of the Act. (3) The consideration for the transfer is to be a common share of the wholly-owned subsidiary and non-share consideration equal to the adjusted cost base of the property transferred. (4) The value of the share is issued to the parent on the exchange exceeds the difference between the fair market value of the transferred property and the boot received on the exchange. (5) There is only one class of shares issued by the wholly-owned subsidiary, there are no V-day value considerations and the transaction is not tax motivated. As stated in IT-432R and IT-291R it is the Department's position that where a shareholder transfers property to a corporation, the consideration and the fair market value of the share issued. If the fair market value of the total consideration received exceeds the fair market value of the property transferred, the excess is included in the income of the shareholder pursuant to subsection 15(1) of the Act. ...

CRA Tags ITR 5907(2.01) Principal Issues: Does the assumption by an acquiring foreign affiliate of liabilities of a disposing foreign affiliate constitute "consideration received" by the disposing affiliate for purposes of paragraph 5907(2.01) of the Regulations? ... Although there is no definition of "consideration received" in the Income Tax Act (the "Act"), it is commonly understood that "consideration received" by a taxpayer in respect of a particular disposition of assets includes the amount of any liabilities of the taxpayer that are assumed by a purchaser as part of the purchase of the disposed assets. ... " In summary, it is our view that the assumption by the Receiving FA of liabilities of the Disposing FA on a transfer of property to it, is "consideration received" by the Disposing FA for the property transferred for purposes of paragraph 5907(2.01)(a) of the Regulations. ...

In connection with these corporate transactions, DC will distribute to TC1 the excess of the TC1 Consideration Notes and the TC1 Redemption Notes over the fair market value of 1 common share of DC and to TC2 the excess of the TC2 Consideration Notes and the TC2 Redemption Notes over the fair market value of 1 common share of DC. ... In connection with the winding-up of DC, DC will distribute to TC1 the remainder of the TC1 Consideration Notes and the TC1 Redemption Notes and XXXXXXXXXX Class "B" shares of Subco1 and DC will distribute to TC2 the remainder of the TC2 Consideration Notes and the TC2 Redemption Notes and XXXXXXXXXX Class "B" shares of Subco1. As a result of the assignment and distribution of the remainder of the TC1 Consideration Notes and the TC1 Redemption Notes and the assignment and distribution of the remainder of the TC1 Consideration Notes and the TC1 Redemption Notes, the obligations under each such promissory note will be cancelled. ...