Search - consideration

Reasons: Stock dividend shares would be considered to be issued for NIL consideration, but by their nature are redeemable for more than NIL 960508 XXXXXXXXXX V. ... Our opinion is that where a share has been issued as a stock dividend, the consideration for which the share was issued would be NIL, which is relevant in determining whether the conditions in paragraphs 256(1.1)(c), (d) and (e) of the Act, which refer to "an amount equal to the fair market value of the consideration for which the shares were issued" are met. ... Our response would not change since we would still consider that the Class B preferred shares were issued for NIL consideration. ...

Reasons: Pursuant to section 51, when a shareholder receives no consideration other than the new shares, the exchange is deemed not to be a disposition. It is a question of fact whether the shareholder receives consideration other than the new shares. ... It is a question of fact whether a taxpayer receives consideration other than the new shares. ...

20 February 2004 External T.I. 2003-0051961E5- Application of paragraph 149.1(12)(a) Unedited CRA Tags 149.1(12)(a) Principal Issues: Will subsection 149.1(12) deem a charitable foundation not to have acquired control of a corporation where the corporation is controlled by the foundation and other non-arm's length persons, the foundation acquired shares of a corporation for consideration and subsequently, as a consequence of the redemption of shares, the foundation holds more than 5% of the issued shares of a class of a corporation. ... For example, assume in Year 1 a foundation and persons with whom the foundation does not deal at arm's length control a corporation and the foundation purchased or otherwise acquired for consideration less than 5% of the issued shares of a class of the capital stock of a corporation. ... However, in Year 2, since the percentage ownership is greater than 5% of the issued stock of that class due to the redemption and since the shares were acquired for consideration in Year 1, subsection 149.1(12) does not deem the foundation not to have acquired control of the corporation for the purposes of paragraphs 149.1(3)(c) or 149.1(4)(c). ...

Subsection 146(9) will cause an income inclusion to the annuitant equal to the difference between the fair market value of the shares of the CCPC at the time they are disposed of by the RRSP and any consideration received by the RRSP on the disposition. ... Subsection 146(9) of the Act states that if an asset is transferred from an RRSP for consideration which is less than the fair market value of the property at the time of the transfer, or for no consideration, the difference between the fair market value of the property and the consideration, if any, shall be included in computing the income of the annuitant of the RRSP. Accordingly, if consideration taken on the transfer (sale) is nil, there will be no income tax consequence as long as the fair market value of the shares of the CCPC was also nil at the time of the transfer. ...

27 October 2020 CTF Roundtable Q. 4, 2020-0862451C6- Sale of TCP by a partnership Unedited CRA Tags 116 Principal Issues: Whether a purchaser who purchases TCP from a partnership may be liable under subsections 116(5) or (5.3) of the Act in respect of the portion of the consideration paid to the partnership that, after reasonable inquiry, the purchaser believes is attributable to direct or indirect partners (through one or more other partnerships) of the partnership that are resident in Canada? ... Would the CRA confirm that a purchaser who purchases TCP or property described in subsection 116(5.2) of the Act from a partnership has no liability under subsections 116(5) or (5.3) of the Act in respect of the portion of the consideration paid to the partnership that, after reasonable inquiry, the purchaser believes is attributable to direct or indirect (through one or more other partnerships) partners of the partnership that are resident in Canada? ... For the purposes of (inter alia) paragraph 2(3)(c) and section 116 of the Act, each partner of the partnership is considered to have disposed of their respective interest in the property of the partnership for proceeds of disposition equal to the portion of the consideration that is proportionate to the partner’s interest in the property. ...

There is no requirement that the consideration given to a resource expenditures.  The consideration for which the Shares are issued will be valued at it fair market value at that time. ... If the value of the property is $1,000, the consideration given for the flow-through shore agreement with the issuing corporation would renounce resource expenditures to the taxpayer in an amount equal to $1,000. ...

Consequently, subparagraph 66.1(6)(a)(iv) operates for partners to receive their share of the CEE incurred by partnerships in consideration for flow-through shares. ... In other words, expenses which are CEE by virtue of subparagraphs (i) to (iii.1) would be disqualified from treatment as CEE if the expenses were incurred in consideration for shares of a corporation. ... Consequently, subparagraph 66.1(6)(a)(iv) operates for partners to receive their share of the CEE incurred by partnerships in consideration for flow-through shares because such CEE referred to in subparagraph (v) is identical to that in (iv). ...

There is no requirement that the consideration given to a resource expenditures. The consideration for which the Shares are issued will be valued at it fair market value at that time. ... If the value of the property is $1,000, the consideration given for the flow-through shore agreement with the issuing corporation would renounce resource expenditures to the taxpayer in an amount equal to $1,000. ...

The consideration to be received by XXX According to the schedule provided in your request, the consideration to be received is significantly less than the current fair market value of the property being transferred. ... This paragraph operates to deny the capital gains deduction to an individual where a capital gain has been realized from the disposition of property as part of a series of transactions in which any property is acquired by a corporation for consideration that does not approximate its fair market vallue at the time of acquisition. It should be noted that the draft legislation to implement the income tax reform measures proposes to amend this provision to apply in situations where the consideration received is significantly less than the fair market value of the property at the time of acquisition. ...

Corporation B agrees to issue as consideration, an agreed number of its common shares and to enter into the appropriate agreements, file the prescribed forms, etc. so that the shares will be flow-through shares for purposes of paragraph 66(15)(d.1) of the Act. 5. ... There is no requirement that the consideration given to a resource corporation for the Shares be property used to incur resource expenditures. The consideration for which the Shares are issued will be valued at its fair market value at that time. ...