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While we cannot comment definitively as to whether Old 245(1) would apply to the situations under consideration by you without a more complete understanding of all of the relevant facts, we consider that it will generally not be possible to apply Old 245(1) to deny capital cost allowance claims and terminal losses of a partnership that are based on the actual, bona fide (albeit historical) cost of the depreciable property to the partnership. ... There is no provision of the Act which requires the UCC of an asset of a partnership to be revalued to fair market value other than subsection 13(7) which does not apply in the circumstances under consideration.  ... Her Majesty The Queen, 88 DTC 6427 (F.C.T.D.) may have some bearing on the cases under consideration by you. for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch ...

Humenuk (613) 957-2134 January 14, 1993 Dear XXXXXXXXXX We received your letter of October 26, 1992 concerning tax considerations relevant to individuals working in the transportation industry. ... Other income tax considerations arise where an individual has incorporated in order to carry on a particular business. ... Since this issue relates to the Department's administrative procedure in respect of unvouched meal expenses, we have forwarded a copy of your letter to the Assessment of Returns Directorate for their consideration and reply. ...

In any event, we can again assure you that the practice of the Rulings Directorate has been consistent with respect to the application of subsection 55(2) to those transactions on which a corporation transfers property to an arm's length party in consideration for shares which are subsequently redeemed. ... The proposed subsection provided that a corporation which received a taxable dividend in respect of a share which was received as consideration for property transferred under section 85 was required to treat the entire dividend as a gain from the disposition of a capital property. ... Since the subsection referred to a reduction in a capital gain that would have been realized on the disposition of any share, it included a capital gain inherent in a share issued as consideration for an asset acquired in an arm's length transaction which was subject to a section 85 transaction. ...

15 April 1987 Income Tax Severed Letter RCT 5-2850 F Unedited CRA Tags 85(1), 85(2), 247, 245(1.1), 85(2.1) Dear XXX: This is in reply to your letter of February 4, 1987 concerning: a) the date of disposition of property for purposes of subsections 85(1) and (2) of the Income Tax Act (the "Act") on incorporation of a farming business carried on as a proprietorship and partnership, respectively, and b) whether the redemption of the special shares received as consideration by the transferors would result in a capital gain or a dividend considering the effects of subsections 85(2.1) and 245(1.1), and section 247 of the Act on the transactions. ... The implication is that if the date of transfer of the property to the corporation is considered to be the date when the legal work was completed, the above tax provisions are either automatically applicable (subsection 85(2.1)) or may reasonably be considered to apply (subsections 245(1.1) and 247(1)) with the result that the redemption of the special shares consideration will give rise to i) an amount being included in income either as a taxable dividend or as property income, other than a taxable dividend, (subsections 247(1) or 85(2.1)) or ii) the taxable capital gains otherwise realized being denied the deduction under section 110.6 of the Act (subsection 245(1.1)). ... We are enclosing the following Departmental publications which you may find of assistance in determining on what date the transferors in your situations transferred the property to their corporations: Interpretation Bulletin IT-170R "Sale of Property- When Included in Income Computation" Interpretation Bulletin IT-220R "Capital Cost Allowance- Proceeds of Disposition of Depreciable Property" Interpretation Bulletin IT-460 "Dispositions- Absence of Consideration" Interpretation Bulletin IT-50R "Capital Cost Allowance- of Acquisition of Depreciable Property" As regards the application of subsections 245(1.1), 247(1) and 85(2.1) of the Act, we have the following additional comments to make. ...

The second question you have asked is whether consideration in the form of debt received by a farm partnership for its farm inventory on a subsection 85(2) transfer can be transferred to the partners tax deferred under subsection 85(3). ... Consideration given by the corporation is two common shares and debt of $99,998. ... Where both the vendor and the corporation are reporting income on the cash basis, the consideration for inventory transferred to the corporation should be included in computing income of the vendor for the year or years in which payments are received from the corporation and the corresponding costs of the inventory would be deductible by the corporation in the year they are paid. ...

Wilson 957-2063 Attention: Rene Tapp HBW 1482-1 ANNUAL REVIEW OF GENERAL TAX GUIDE Further to your memorandum of April 24, 1990, we have reviewed the Guide from a provincial and international viewpoint, and offer the following comments:1) Step 1- Identification Area Consideration should be given to adding the underlined words in the following sentence: "If you left Ontario before December 31, 1990 to live outside Canada but kept residential ties in Ontario you are likely a "factual" resident of Ontario. ... We are not convinced that the elimination of this "in and out" procedure simplifies matters because of the adjustments necessary for purposes of the child tax credit, federal sales tax credit and northern residents deduction xxxxx xxxxx 3) Line- 219- Moving Expenses Consideration should be given to tightening up the following sentence: "the move was from one place in Canada to another place in Canada (except deemed and factual residents, and students)" Under this present wording, all Canadian residents are excluded from the rule. ... Reference to "by Canada" may solve the problem. 6) Line 314- Pension Income Amount Consideration should be given to adding the following words to the sentence "pension payments from a pension plan that you receive as a life annuity,": "(including both domestic and foreign sources)" Our division has received several queries in the past regarding the eligibility of foreign pensions for the pension credit. ...

CALU Roundtable – May 2022 Question 11 – Application of Section 160 to Segregated Fund Policies Background Where a tax debtor has transferred property to a non-arm’s length person (such as a spouse, child, sibling or parent) for low or no consideration, section 160 of the Income Tax Act (the “Act”) provides that the transferee becomes jointly and severally liable for the tax debtor’s tax debt for an amount up to the fair market value of the property transferred less any consideration paid by the transferee on the transfer. ... Due to the complex nature of these products, the application of section 160 of the Act is decided with consideration to the specific contracts and legislation that applies to each case. ...

The transaction was structured such that the offer consideration consisted only of shares of Acquireco. ... The offer consideration is being held in trust for these minority shareholders by a depository until such time as they come forward and tender their share certificates in exchange for the offer consideration. ...

Paragraph 84.1(1)(a) of the Act provides, in certain circumstances, for a paid-up capital reduction for each class of the shares of a purchaser corporation from which shares were issued as consideration for its acquisition of the shares of another corporation. Where no shares of the purchaser corporation are issued as consideration for the shares acquired by it, this provision would not be applicable. 3. Paragraph 84.1(1)(b) of the Act, in certain circumstances, treats a purchaser corporation as having paid a dividend to the transferor of the shares it has acquired where the aggregate of the amount of the increase in the legal paid-up capital of its shares arising as a result of the share transfer and the fair market value of the non-share consideration given by it for the transferred shares exceeds the total of (a) the greater of the adjusted cost base, as modified under paragraph 84.1(2)(a) or (a.1), to the transferor of the transferred shares and the paid-up capital of the transferred shares, and (b) the total paid-up capital reductions required by paragraph 84.1(1)(a) to be made by the purchaser corporation. ...

While we cannot comment definitively as to whether Old 245(1) would apply to the situations under consideration by you without a more complete understanding of all of the relevant facts, we consider that it will generally not be possible to apply Old 245(1) to deny capital cost allowance claims and terminal losses of a partnership that are based on the actual, bona fide (albeit historical) cost of the depreciable property to the partnership. ... There is no provision of the Act which requires the UCC of an asset of a partnership to be revalued to fair market value other than subsection 13(7) which does not apply in the circumstances under consideration. ... Her Majesty The Queen, [[1988] 2 C.T.C. 239] 88 D.T.C. 6427 (F.C.T.D.) may have some bearing on the cases under consideration by you. ...