Search - consideration

The Queen, 2009 DTC 1394 [at at 2155], 2009 TCC 597-- summary under Subsection 74.1(2) Summary Under Tax Topics- Income Tax Act- Section 74.1- Subsection 74.1(2) The taxpayer and her son transferred real estate on a rollover basis to a partnership in consideration for Class A units of the partnership having a redemption value, subject to a price adjustment clause, of approximately $1.25 million for each of them. Several days later, the partnership issued Class C units to a family trust for consideration of $100. ...

The Queen, 2002 DTC 1222 (TCC), rev'd 2003 DTC 5225, 2003 FCA 128-- summary under Disposition Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Disposition The taxpayer and corporations controlled by him disposed of shares of three corporations engaged in manufacturing plastic moulds and caps and received, in addition to sale proceeds for the shares, lump sums (payable in instalments) in consideration for giving non-compete covenants. McArthur T.C.J. characterized the non-compete payments as consideration for the disposition of the right to compete with the purchaser, with the result that they represented capital gains. ...

The Queen, 2002 DTC 1222 (TCC), rev'd 2003 DTC 5225, 2003 FCA 128-- summary under Paragraph (e) Summary Under Tax Topics- Income Tax Act- Section 54- Disposition- Paragraph (e) The taxpayer and corporations controlled by him disposed of shares of three corporations engaged in manufacturing plastic moulds and caps and received, in addition to sale proceeds for the shares, lump sums (payable in instalments) in consideration for giving non-compete covenants. McArthur T.C.J. characterized the non-compete payments as consideration for the disposition of the right to compete with the purchaser, with the result that they represented capital gains. ...

The Queen, 2006 DTC 3006, 2006 TCC 256-- summary under Substance Summary Under Tax Topics- General Concepts- Substance In finding that a transfer by the taxpayer of business assets to a partnership in consideration for partnership units and non-units consideration ("boot") should not be recharacterized as a transfer by the taxpayer solely for boot, notwithstanding that the partnership thereafter indirectly distributed cash to the holding-company shareholders of the taxpayer by subscribing for preferred shares, Bonner J. noted that cases cited to him involving a preference for the supposed substance of transactions over their form were contrary to the approach taken by the Supreme Court of Canada in Shell Canada Ltd. v. ...

The Queen, 2016 TCC 2-- summary under Subsection 160(1) Summary Under Tax Topics- Income Tax Act- Section 160- Subsection 160(1) double application of s. 160 re asset sale for excess consideration Shortly before a corporation (“Antoni”) sold all its assets to a third party, it acquired all the assets of a corporation (“LCR”) owned by its shareholder’s brother, which had been distributing one of its imported product lines in North America. Lamarre ACJ found that the assets so acquired from LCR did not include any valuable goodwill, so that the consideration paid by Antoni was inflated. ...

After FSL had subsequently sued the Province for reducing the space that was leased by it, the action was settled by the Province agreeing to pay FSL $2,056,250 in cash and, for $2,400,000, to grant an irrevocable assignable option (the “Option”) to FSL to purchase Founders Square (which was stated to have a fair market value of $2.4 million), together with an assignment of the Ground Lease in favour of FSL The $2.4 million consideration was to be funded by way of set-off against an additional amount of $2.4 million amount owing by the Province to FSL under the settlement agreement. ... FSL assigned $160,000 of the $2.4 million amount, that it was entitled to receive under the settlement agreement from the Province, to ADL in consideration for an ADL promissory note. FSL then surrendered the existing ground lease to the Province pursuant to a surrender agreement which stated that the consideration provided by FSL thereunder to the Province was “$10.00 and other good and valuable consideration,” the Province transferred the fee simple interest in Founders Square to ADL, and ADL and FSL entered into the new ground lease. ...

The Queen, 2018 TCC 3, aff'd on s. 18(1)(a) grounds 2019 FCA 36-- summary under Paragraph 110.1(1)(a) Summary Under Tax Topics- Income Tax Act- 101-110- Section 110.1- Subsection 110.1(1)- Paragraph 110.1(1)(a) consideration for "gift" was elimination of obligation to invest the funds The appellant was the limited partner of a partnership (“SEC”) that had become insolvent during efforts to relaunch a paper mill close to the City of Chandler. ... Dupont, 2016 QCCA 47 at paras. 28-31 for the proposition that for there to be a gift there must be “a transfer of property of a donor to a donee without the donor receiving equivalent consideration in return” and that “the donor must have the actual intention to part with the transferred property for the benefit of the donee without receiving a benefit in return” (para. 37), and in finding (respecting the first test) that the appellant had received consideration equal to the two resulting “gifts” by it to the City of $7.2 million and $2.1 million, Ouimet J stated (at paras. 45-6, TaxInterpretations translation): When the appellant proposed to SDEIC and the City of Chandler to pay these sums to the City of Chandler, the obligation of the appellant towards SDEIC still existed. ... Since the payment of the sums … to the City of Chandler had the effect of freeing the appellant of its obligation to negotiate in good faith to create a limited partnership, the consideration received by the appellant in exchange for such payment was the amount by which that obligation was extinguished. ...

The Queen, 95 DTC 200, [1994] 2 CTC 2450 (TCC), briefly aff'd 96 DTC 6085 (FCA)-- summary under Subparagraph 152(4)(a)(i) Summary Under Tax Topics- Income Tax Act- Section 152- Subsection 152(4)- Paragraph 152(4)(a)- Subparagraph 152(4)(a)(i) goodwill consideration misrepresented as fees The taxpayer was found to have made a misrepresentation attributable to neglect, carelessness or wilful default when it deducted "management fees" in its tax returns paid pursuant to a consulting agreement whose legal substance was the provision of consideration for the purchase of goodwill. ...

., 98 DTC 1335, [1998] 1 CTC 2821 (TCC)-- summary under Subsection 97(2) Summary Under Tax Topics- Income Tax Act- Section 97- Subsection 97(2) capital withdrawal in substance boot The taxpayer borrowed money from a bank, contributed the borrowed money and a shopping centre to a partnership in consideration for the assumption of indebtedness and the issuance of debt and a partnership interest. ... In finding that s. 85(1)(b) should be applied to increase the consideration deemed to be received by the taxpayer to an amount above that initially elected, Bell TCJ. stated (at p. 1339): "The withdrawal of approximately 2/3 of the capital account at the time of asset transfer followed 38 days later by the withdrawal of the balance is inconsistent with the concept of a true capital account. ...

Loss The taxpayer entered into an agreement with the corporation owned by him and his wife to be paid fees in full consideration for providing guarantees of loans to be made to the corporation by The Royal Bank. However, in the absence of specific evidence that the fees actually paid by the corporation to the taxpayer were consideration for the provision of guarantees rather than for other services, Bonner J. found (at p. 1096) that the "guarantees were not shown to have been given in the course of a business or adventure in the nature of trade involving the provision of guarantees for reward". ...