Search - consideration

The shares issued by the corporation result from a transfer to the corporation, to which subsection 85(1) of the Act applies, of shares held by a shareholder in that same corporation in consideration for shares only of the corporation.  ... You also indicated that the aggregate PUC of the shares issued by the corporation in consideration for the transfer is equal to the PUC of the shares transferred by the shareholder. ...

Seidel Attention: XXXXXXXXXX March 22, 1994 Dear Sirs: This is in reply to your letter submitted by facsimile on March 10, 1994 with respect to the application of section 85.1 of the Income Tax Act S.C. 1970-71-72,c.63 as amended consolidated to June 10, 1993 (the "Act") in the situation where a taxpayer exchanges shares of a taxable Canadian corporation that are capital property for non-share consideration and shares of another taxable Canadian corporation. ... Paragraph 7 of IT-450R discusses the situation where a vendor receives shares of the purchaser for some of the exchanged shares and cash or other consideration for other exchanged shares. ...

The options are received in respect of an employment where the options are granted to directors in consideration for the services to be performed as directors. ... It is our view that options are received in respect of an employment where the options are granted to directors in consideration for the services to be performed as directors. ...

The test found in subparagraph 14(5)(a)(iv) (referred to as the mirror image test) provides that where the consideration given by him therefor (the fishing privilege) was such that, if any payment had been made by him after 1971, for that consideration, the payment would have been an eligible capital expenditure of the taxpayer. ...

Also, the provisions of paragraph 110.6(7)(b) would deny the capital gains exemption derived from the disposition of property as part of a series of transactions or events, in which any property was acquired by a corporation for consideration that is significantly less than the fair market value of the property at the time of acquisition. Hence, the provisions of paragraph 110.6(7)(b) of the Act would not apply provided that, during the course of a purification that is part of the same series of transactions or events which include the realization of a capital gain on the disposition of a property, a property has not been acquired by a corporation for consideration that does not approximate the fair market value of the property. ...

Specifically, you asked the Department to confirm that subparagraph 40(2)(g)(ii) of the Act would not be applied to deny a capital loss in the following circumstances: * the taxpayer received inadequate consideration in return for guaranteeing a debt of the corporation. * the loss on the guarantee occurred once the taxpayer was no longer a shareholder. * the taxpayer was a shareholder at the time the debt of the corporation was guaranteed. * all the other conditions outlined in paragraph 6 of IT-239R2 are met. ... It is our view the same reasoning would apply in respect of the application of subparagraph 40(2)(g)(ii) of the Act in respect of a loss on a guarantee that was given for less than adequate consideration. ...

Whether a beneficial interest was acquired for consideration payable to the trust or to any person who has made a contribution to the trust is a question of fact, however there is nothing particular in the Act prohibiting a communal organization from being a personal trust. The fact that members of a congregation must devote their working lives to the activities of the congregation does not mean that their interests in the trust are acquired for consideration payable directly or indirectly to the trust. ...

This determination must be based on review of the actual policy under consideration and the insurer's accounting and valuation methodologies for determining its liabilities in respect of the policy. As discussed, should your members be prepared to provide us with detailed information in this regard we would be prepared to give this matter further consideration. ...

Subco is a taxable Canadian corporation and its one common share issued on incorporation for nominal consideration is held by the Employee. ... In paragraph 11, delete the first subparagraph and replace with the following: "XXXXXXXXXX will acquire the one common share of Subco held by the Employee for consideration equal to the fair market value of the one common share at that time. ...

The consideration received by XXXXXXXXXX for any such transactions will consist solely of cash or indebtedness that is not convertible into other property, or a combination thereof. ... The following will be added at the end of paragraph 27: "Each of XXXXXXXXXX Landco and XXXXXXXXXX Landco may then sell some, or all, of its interest in certain Lands, at fair market value, to purchasers who deal at arm's length with XXXXXXXXXX Landco and XXXXXXXXXX Landco for consideration consisting of cash or indebtedness that is not convertible into other property, or a combination thereof. ...