Search - consideration

The consideration received by the transferor consists solely of shares of the capital stock of the transferee corporation. Would the CRA invalidate the price adjustment clause and apply subsection 15(1) of the ITA, if the persons believe that they do not have to file an amended election and pay the penalty provided in subsection 85(8) of the ITA, because the "agreed amounts" and the "description of property disposed of" remained unchanged, and the parties made the corrections required by the CRA concerning the amount of the fair market value of the transferred property and the consideration received by the transferor? ... An acceptable price adjustment clause has to adjust the price of the property transferred and the consideration received, not the quantity of the property transferred. ...

The definition of personal trust in subsection 248(1) of the Act provides, in the case of an inter vivos trust, that no beneficial interest in the trust may be acquired for consideration payable directly or indirectly to the trust or any person who has made a contribution to the trust. It further provides that where a beneficial interest in the trust is acquired by transfer of property to the trust by one person, such a beneficial interest in the trust shall be deemed to be acquired by such person for no consideration. Where two or more persons have acquired beneficial interests by virtue of transferring property to the trust those persons must be related in order that their interests be deemed to have been acquired for no consideration. ...

You have discussed an alternative interpretation of "B" in the above formula as being the elected amount less any non-share consideration. ... The Department's interpretation of the formula provided in subsection 85(2.1) of the Act is as follows: A =the stated capital of the new shares less the paid-up capital of the old shares B =the agreed amount less the fair market value of non-share consideration C =the stated capital of the preferred shares issued. ... We have referred this problem to the Department of Finance for their consideration. ...

As regards capital losses from guaranteeing corporate loans for inadequate consideration, the Department's position, as stated in paragraph 4 of Interpretation Bulletin IT-239R2, is that a capital loss arising where a taxpayer is required to honour a guarantee given for inadequate consideration or for no consideration is nil by virtue of subparagraph 40(2)(g)(ii) of the Act. ...

As we understand the basic facts of your situation, A corporation with a number of classes of shares was incorporated in XXXXXXXXXX by the issue, for cash consideration of $XXXXXXXXXX, of XXXXXXXXXX class A shares which are voting, participating, and convertible at the option of the shareholder into class D preferred shares. Class D shares are non-voting, non-participating, non-cumulative as to dividends of 1% per month on the amount paid-in in preference to the other classes of shares, and retractable at the fair market value of consideration received on issue. ... Subsection 110.6(9)(c) of the Act defines the "average annual rate of return" on a share to be the rate that a knowledgeable and prudent investor would expect to receive if "the proceeds to be received by the investor on the disposition of the share is the same amount the corporation received as consideration on the issue of the share". ...

However it is our opinion that financial hardship can only be determined on a case by case basis and only after giving consideration to all of the circumstances of any particular case. ... Consequently, while CPP contributions that are required to be paid during the leave period are to be deducted and remitted by the trustee as by any other employer, CPP contributions paid in the year prior to the leave period must be taken into consideration by the trustee. ... However, since CPP contributions made during the year prior to the leave period are to be taken into consideration by the trustee, the amount of contributory earnings reported by the trustee may not coincide with the earnings reported in box "C" for that particular year. ...

-No, the meaning of capital property does not include an eligible capital property Reasons: The respective definition of each term in subsection 248(1) and section 54 of the Act, taking into consideration the definitions of all other relevant terms that are applicable as well as published Departmental positions. ... The term "eligible capital property" of a taxpayer is defined in section 54 of the Act to mean: "any property, a part of the consideration for the disposition of which would, if the taxpayer disposed of the property, be an eligible capital amount in respect of a business" Subsection 14(1) reads in part: "...an amount determined in respect of a taxpayer, for E in the definition of "cumulative eligible capital" in subsection (5) (in this section referred to as an "eligible capital amount")..." "E" of the definition of "cumulative eligible capital" in subsection 14(5) is: "...an amount which, as a result of a disposition..., the taxpayer has or may become entitled to receive, in respect of the business carried on or formerly carried on by the taxpayer therefor was such that, if any payment had been made by the taxpayer after 1971 for that consideration, would have been an eligible capital expenditure of the taxpayer in respect of that business... ...

Specifically it "means a contract of insurance in which the consideration is not fixed or certain at the time the contract is made and is to be determined at the termination of the contract or at fixed periods during the term of the contract according to the experience of the insurer in respect of all similar contracts, whether or not the maximum amount of such consideration is predetermined"; g) "Regulations" means the Income Tax Regulations; h) "Superintendent" has the meaning assigned under XXXXXXXXXX the Insurance Act. ... No other consideration will be received or given by any member or policyholder of Aco or Bco. ...

An annuity or other periodical payment made, esp. by a government, a company, or an employer of labour, in consideration of past services." Accordingly, a plan will, in general, be considered to be a superannuation or pension fund where contributions have been made to the plan by or on behalf of an employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodical payment on or after the employee's retirement in consideration for his or her employment services, and in some cases, where amounts have been contributed under the plan by a government. ...

The appropriate treatment for income tax purposes of outlays made by a taxpayer, as well as the determination of the Class in Schedule II to the Regulations to which the cost of property acquired by a taxpayer may be classified, are questions of fact involving the application of the provisions of the Income Tax Act (the "Act") and the Regulations to the facts of the particular situation under consideration. ... It would be a question of fact whether a particular property under consideration would otherwise be included in Class 1, 2 or 8 of Schedule II to the Regulations and would not be expressly excluded from paragraph (a) to Class 43.1 pursuant to the post-amble thereto. ... Whether or not particular equipment would be "ancillary to" Qualified Equipment for the purposes of subparagraph (a)(iv) to Class 43.1 in a given situation would have to be determined from the facts of the situation under consideration. ...