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Example 3 Application of the annual CEE deduction to compute a taxpayer’s income for a tax year Description CCEE pool value Income Taxpayer’s CCEE opening balance for the tax year $0 n/a Taxpayer’s income from all sources for the tax year n/a $100 Feasibility study expenses that qualify as CEE(CRCE) $70 n/a Maximum CEE deduction for the tax year ($70) ($70) Taxpayer’s CCEE balance and income for the tax year $0 $30 2.43 Any consideration received by a taxpayer for property or services, the cost of which was CRCE, will be deducted from the taxpayer’s CCEE pool under subsection 66(12.1). For example, if the taxpayer has disposed of feasibility studies, the cost of which previously qualified as CEE(CRCE), the taxpayer will reduce its CCEE pool by the amount of the consideration received. ... Flow-through shares 2.52 A share or a right is an FTS under subsection 66(15) if: it is: a share issued by a PBC (other than a prescribed share which is defined in subsections 6202.1(1) and (2) of the Regulations) or a right to acquire a share of the capital stock of a PBC (other than a prescribed right which is defined in subsections 6202.1(1.1) and (2.1)); it is issued pursuant to a written agreement with an investor under which the PBC agrees to incur CEE(CRCE) in an amount equal to the consideration received for the share or the right and renounce this amount in favour of the investor within a specific period of time; and it is issued for consideration that does not include property transferred by the investor on a tax-deferred basis. 2.53 If the risk of loss to the investor is limited or it may be reasonable to consider that there is an obligation to repay or return all or part of the original investment, these shares or rights are considered prescribed shares or prescribed rights, respectively, and are not FTSs. ...

Because the payment is provided for in an agreement made during employment in consideration for what the employee is not to do after the end of employment, subsection 6(3) deems the payment to be employment income. ...

This determination requires an examination and comparison of all the facts concerning each of the business operations in which the corporation is engaged. 1.12 The following are important criteria for making the determination described in ¶1.11: the amount of income derived from each business operation; the amount of gross revenue attributable to each business operation; the operating costs and expenses of each business operation; the capital employed in each business operation; and the time and effort expended by the employees on each business operation. 1.13 The question of whether the principal business operations of a corporation are of the kinds specified in ¶1.3 is one of fact that must be determined after a consideration of all of the surrounding circumstances and a review of all activities carried on by the corporation. ... This share or right must be issued to a person under an agreement in writing in which the PBC agrees to incur CEE or CDE in an amount not less than the share or right consideration. ...

An adoption in fact is also known as a de facto adoption. 1.16 Whether a de facto adoption has occurred at a particular time is a question of fact and has to be determined based on a consideration of the particular circumstances. ... Similarly, an individual is beneficially interested in the trust in the circumstances described in ¶1.31(c) even if the trustees have full discretionary powers concerning the distribution of the capital or income of the trust so that the individual may in fact receive nothing from the trust. 1.33 A personal trust, as defined in subsection 248(1), is a trust (other than certain trusts that are or were unit trusts) that is either a testamentary trust or an inter vivos trust in which no beneficial interest was acquired for consideration payable to the trust or to a person or partnership that has made a contribution to the trust. ... As such, a personal trust will mean a trust (other than certain trusts that are or were unit trusts) that is either: a graduated rate estate (see ¶1.33.2); or a trust in which no beneficial interest was acquired for consideration payable to the trust or to any person or partnership that has made a contribution to the trust. 1.33.2 Subsection 248(1) has been amended to add the definition of graduated rate estate. ...

Factors indicating that a particular receipt is a windfall include the following: the taxpayer had no enforceable claim to the payment, the taxpayer made no organized effort to receive the payment, the taxpayer neither sought after nor solicited the payment, the taxpayer had no customary or specific expectation to receive the payment, the taxpayer had no reason to expect the payment would recur, the payment was from a source that is not a customary source of income for the taxpayer, the payment was not in consideration for or in recognition of property, services or anything else provided or to be provided by the taxpayer, and the payment was not earned by the taxpayer as a result of any activity or pursuit of gain carried on by the taxpayer and was not earned in any other manner. ... If, as is frequently the case, such a loss is not reasonably incidental to the normal income-earning activities, considerations in determining deductibility in cases involving senior employees include: the extent of the senior employee’s authority and control. ...

This requires a consideration of all relevant facts and information. Factors relevant to determining the tax treatment of an amount are discussed throughout the rest of this Chapter, or where appropriate, readers are referred to Income Tax Folio S1-F2-C3. ... Under the common law, a gift is a voluntary transfer of property from a donor to a donee for which no benefit or consideration flows to the donor. ... In contrast to the common law, consideration received in connection with a gift will not necessarily invalidate the gift in civil law. 1.80 Relieving provisions in the Act provide that the receipt of a benefit or consideration (advantage) will not in and of itself disqualify the transfer as a gift for purposes of the charitable donation tax credit. ...

These assets would then be tested for an eligible purpose. 1.63.2 In situations such as those in ¶1.63.1 but where the debt represents only partial consideration for the share acquisition, if some assets do not meet the purpose test, the taxpayer may adopt a flexible approach in linking the debt to the eligible assets formerly held by the acquired corporation, similar to the situation described in ¶1.38. ... In order for the purchaser of the preferred shares to meet the purpose of earning income requirement in paragraph 20(1)(c), consideration must be given to the income producing capacity of the issuer of the preferred shares. ... Discounts arising on the issuance of debt obligations 1.94 Where money is borrowed with a stated rate of interest and in consideration of a promise to pay a larger amount, subsection 20(2) will deem the larger amount to be the amount borrowed for purposes of paragraph 20(1)(c). ...

Third-party amounts may be used in determining the amount deductible under paragraph 60(b) only if they are deducted from the support amounts otherwise payable with the express or implied concurrence (discretion) of the recipient. 3.54 Subsection 60.1(1) ensures that third-party amounts payable for child support are taken into consideration in determining the amount the payer may deduct under paragraph 60(b). 3.55 Third-party amounts payable under a court order or written agreement for specific living expenses of the recipient (or the children in the recipient's custody) such as medical, rent or mortgage expenses cannot be used in determining the amount the payer may deduct if they are not support amounts. ... Subsection 60.1(2) also ensures that third-party amounts payable for child support are taken into consideration in determining the amount the payer may deduct under paragraph 60(b). 3.58 Generally, the court order or written agreement must explicitly state that subsections 60.1(2) and 56.1(2) are to apply to the specific-purpose payments. ... The Queen, 2013 FCA 69, the Federal Court of Appeal confirmed that although the Federal Child Support Guidelines give consideration to the incomes of both the payer and the recipient to determine the quantum of child support, only the payer is considered to have, for purposes of the eligible dependant tax credit, a legal obligation to pay a support amount. ...

While the residence status of an individual can only be determined on a case by case basis after taking into consideration all of the relevant facts, generally, unless an individual severs all significant residential ties with Canada upon leaving Canada, the individual will continue to be a factual resident of Canada and subject to Canadian tax on his or her worldwide income. ... The circumstances must be examined as a whole, but it is nevertheless obvious that considerations based on the personal acts of the individual must receive special attention. ...

Although consideration should be given to the availability and quantum of support provided, a person is generally considered to be dependent on an individual if the latter has actually supplied necessary maintenance out of their own resources. ... Consideration should be given to the relationship between the eligible person with a disability and the other individual throughout the particular period during which support was provided, to determine whether the relationship as a whole was one of dependency. 2.31.2 Where the eligible person with a disability was in receipt of social assistance or any other type of financial or non-financial support, the supporting individual must be able to show that the other assistance was insufficient to fully meet the basic needs of the eligible person with a disability and that the person had to rely on the additional support provided by the supporting individual. 2.31.3 In the context of ¶2.31.2, financial support involves providing money in order for the person to acquire the basic necessities of life such as food, shelter, and clothing. ...