Search - consideration

13 May 2014 External T.I. 2014-0525491E5- Emigration to Poland- Various tax considerations CRA Tags 212(1)(h) Treaties Article XVII Treaties Article XVIII 212(1)(l) Treaties Article III Principal Issues: 1) Canadian withholding tax implications in respect of monthly RPP, RRSP, OAS, CPP and QPP payments and a RRSP lump sum payment received by an individual resident of Poland; 2) Canadian income tax implications in respect of sale of a piece of land situated in Canada by an individual prior to and after his/her emigration from Canada; and 3) Limitation period in paragraph 3 of Article 23 of the Canada-Poland Tax Treaty. ...

Principal Issues: 85.1(1) and 7(1.5) apply to share for share exchanges; the Department allows 85.1(1) to apply to some transfers where non-share consideration was also received. ... Section 85.1 has similar rollover provisions for share for share exchanges, and also does not apply where there was consideration received other than shares. The Department has stated in Interpretation Bulletin IT-450R that subsection 85.1(1) can still be used where non-share consideration was received if the vendor can identify the proportion of each share or group of shares for which only shares were received as consideration. ...

In such cases, there would be dispositions of the property for proceeds equal to the fair market value of the consideration received. It is necessary to distinguish property settled on (or contributed to) the trust for nil proceeds from property sold to a trust in return for valuable consideration." ... In your opinion, (former) subparagraph 54(c)(v) of the Act can be applicable to a transfer to a trust whether or not there is consideration. ...

You indicated that the $1 consideration is specified in the legal documentation solely to ensure the agreement is legally binding and asked whether paragraph 69(1)(c) of the Income Tax Act (the Act) would apply, notwithstanding that nominal consideration of $1 would be paid. ... For example, if the agreement governing the transfer provides for consideration of $1 merely to ensure that the agreement is legally binding, the CRA may consider the transfer to be a gift. ... If it is determined that the transfer of property was a sale for inadequate consideration rather than a gift, paragraph 69(1)(c) would not apply. ...

It is our general view that the provisions of subsection 85(1) of the Act could apply where shares of one class of a corporation are transferred to the corporation for consideration consisting of shares of another class of the corporation.  Our general view would not be affected by the fact that the consideration received by the transferring shareholder includes warrants issued by the corporation.  ... Consequently, the fair market value of the warrants would constitute non-share consideration received by the transferor in the course of disposing of eligible property to a taxable Canadian corporation. ...

Principal Issues: (1) Do exploration expenses incurred by a corporation on property owned by a wholly-owned subsidiary for no consideration qualify as CEE of the corporation? ... However, where the exploration work is conducted for no consideration, it is conceivable that the corporation is conducting the exploration activities as the agent for its wholly-owned subsidiary. ... In arm's length situations, the corporation incurring the exploration expenses on properties that it does not own would normally do so for fair market value consideration. ...

3 December 1992 External T.I. 9226025 F- Loss On Guarantee For Inadequate Consideration Unedited CRA Tags 40(2)(g)(ii)   922602 24(1) L. ... Specifically, you asked the Department to confirm that subparagraph 40(2)(g)(ii) of the Act would not be applied to deny a capital loss in the following circumstances: €     the taxpayer received inadequate consideration in return for guaranteeing a debt of the corporation. €     the loss on the guarantee occurred once the taxpayer was no longer a shareholder. €     the taxpayer was a shareholder at the time the debt of the corporation was guaranteed. €     all the other conditions outlined in paragraph 6 of IT-239R2 are met. ... It is our view the same reasoning would apply in respect of the application of subparagraph 40(2)(g)(ii) of the Act in respect of a loss on a guarantee that was given for less than adequate consideration. ...

19 March 2001 External T.I. 2001-0074075- Non-share consideration- 85 rollover Unedited CRA Tags 85(1)(b)\ Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. ...

6 November 1990 External T.I. 9030155 F- Consideration of Preferential Pricing on RRSP as Permitted Benefits Unedited CRA Tags 146(2)(c.4), 146(13.1), 6(1)(a) 24(1) 5-903015   M.P. ...

19 December 1991 External T.I. 9126915 F- Attribution of Gain to Transferor where Nil Consideration Unedited CRA Tags 74.2(1), 74(2), 73(1) 912691 Dear:19(1) Re: Application of Subsection 74.2(1) of the Income Tax Act (the Act} We are writing in reply to your letter of August 19, 1991, wherein you requested that we confirm your views on the interpretation of subsection 74.2(1) of the Act as it relates to the following situation. ...