Search - consideration

13 April 2015 External T.I. 2012-0449141E5 F- Usufruct-- summary under Subsection 107(2.1) Summary Under Tax Topics- Income Tax Act- 101-110- Section 107- Subsection 107(2.1) 107(2.1) application to termination of usufruct created for valuable consideration A corporation sold the usufruct respecting a property to an arm’s length third party for use as a secondary residence, while retaining the bare ownership, and with the usufruct ending when the bare owner redeemed the rights belonging to the usufructuary. ... “By reasons of the consideration that the usufructuary was required to pay to the Grantor of the usufruct, the trust is not a personal trust,” so that s. 107(2) did not apply. ...

2012 Ruling 2011-0431101R3- Cross-border spin-off butterfly-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) interest deduction following b/f cross-redemption On a butterfly reorganization, the non-resident parent of the distributing corporation (DC) exchange its common shares of DC for new common shares and DC Special Shares, and then transfers its DC Special Shares to the transferee corporation (TC) in consideration for TC common shares. On the subsequent butterfly transfer of assets by DC to TC, the consideration includes the assumption of liabilities as well as the issuance by TC of preferred shares. ...

9 October 2015 APFF Roundtable Q. 1, 2015-0595751C6 F- Deductibility of financing fees and 20(1)(e)(v)-- summary under Paragraph 20(1)(e) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(e) discharge of a debt through its assumption or cash proceeds from sub transferee denies a s. 20(1)(e)(v) deduction The exclusion in s. 20(1)(v)(v) for settlement occurring "as part of a series of borrowings or other transactions and repayments" applies where (i) the debt of the taxpayer is settled by the taxpayer transferring assets to a subsidiary in consideration inter alia for an assumption of the debt (with the taxpayer being released) – or (ii) where the debt is not assumed on the asset transfer and the taxpayer instead uses cash consideration received from the subsidiary (funded out of a borrowing by it) to discharge the debt. ...

2010 Ruling 2009-0330901R3- Reorganization of XXXXXXXXXX-- summary under Subsection 107(2.1) Summary Under Tax Topics- Income Tax Act- 101-110- Section 107- Subsection 107(2.1) recognition of capital loss on distribution of capital gain through redemption of most of trust units by corporate unitholder A unit trust (Trust 1), after selling units of a subsidiary LP to its parent (Subco) in consideration for a note, purchases for cancellation most of its units held by Subco in consideration for the transfer to Subco of debt owing by Subco. ...

4 January 2012 Internal T.I. 2011-0408081I7 F- Transactions entre une société et ses actionnaires-- summary under Subparagraph 13(7)(e)(i) Summary Under Tax Topics- Income Tax Act- Section 13- Subsection 13(7)- Paragraph 13(7)(e)- Subparagraph 13(7)(e)(i) s. 13(7)(e)(i) capital cost equals consideration paid even where in excess of FMV A shareholder sells depreciable property to the corporation for a sum exceedingits fair market value ("FMV"). ... However, CRA noted that the excess of the consideration received by the shareholder over the property’s FMV would be a taxable s. 15(1) benefit. ...

3 February 2011 External T.I. 2010-0389601E5 F- Allocation de transport-- summary under Business Source/Reasonable Expectation of Profit Summary Under Tax Topics- Income Tax Act- Section 3- Paragraph 3(a)- Business Source/Reasonable Expectation of Profit allowance from school in “consideration” for arranging child transport was non-taxable Under an agreement with the School Board (which previously provided student free transportation), the parent was required to personally arrange for the transportation of the child in consideration for a specified daily sum received from the School Board as a transportation allowance. ...

CRA responded: Under subsection 248(1), a personal trust is defined, among other things, as a trust in which no beneficial interest was acquired for consideration payable directly or indirectly to the trust or to any person or partnership that has made a contribution to the trust by way of transfer, assignment or other disposition of property. … The question of whether the assumption by the beneficiary of the debt of the trust constitutes consideration for the acquisition of a beneficial interest in the trust is a question of fact…. ...

12 January 2009 External T.I. 2008-0293901E5 F- Article 80-- summary under Subparagraph 20(1)(c)(ii) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c)- Subparagraph 20(1)(c)(ii) indirect use test also applies to the extent of eligible capital attributable to shares repurchased in consideration for debt issuance A small business corporation with nominal accumulated profits purchased for cancellation shares in its capital having nominal capital in consideration for the issuance by it of interest-bearing debt. ...

17 April 2007 External T.I. 2007-0230381E5 F- Option d'achat de biens immeubles-- summary under Paragraph 49(1)(a) Summary Under Tax Topics- Income Tax Act- Section 49- Subsection 49(1)- Paragraph 49(1)(a) allocation of option proceeds between principal residence and business asset to be allocated based on the reasonable value attributed to each type of property CRA indicated that where an option was granted on a farm consisting of a principal residence and the farmland: [T]he portion of the consideration received for the option and its extension allocated to the option for the disposition of the principal residence would not form part of the proceeds of disposition included pursuant to subsection 49(1). The allocation of the consideration received for the option and its extension between the portion for the disposition of the principal residence and the portion for the disposition of the farmland could be based on the reasonable value attributed to each type of property in relation to the total value. ...

8 November 2004 Internal T.I. 2004-0076271I7 F- Émission d'options d'achat d'actions-- summary under Computation of Profit Summary Under Tax Topics- Income Tax Act- Section 9- Computation of Profit unclear whether the FMV of options issued in consideration for purchases of property or services is the cost thereof CRA noted that it was subject to debate whether the FMV of stock options issued by a corporation as consideration for the purchase of assets or as an incentive payment to future clients should be treated as the cost of such assets or services, or whether “the issuance of stock options does not constitute a bona fide disbursement to the corporation and, at the very least, should not be taken into account by the corporation in computing the cost of acquiring property or in computing the expense incurred for a service.” ...