Search - consideration

Is the payment made as consideration for a rate deduction deductible? ... Although the tax treatment of a payment "..as consideration for a reduction in the rate of interest payable by a taxpayer on the debt obligation" is provided for under paragraph 18(9.1)(c) and subparagraph 18(9.1)(f)(i) of the Act, which applies " in the case of a reduction described in paragraph (c)... ... When subsection 18(9.2) applies to the exclusion of subsection 18(9.1) of the Act, the payment made as consideration for a reduction in the rate of interest payable on the debt obligation is deemed to be a prepayment of interest payable in a future year, and the result is a lower deduction in earlier years, increasing over time based on what would have been the remaining term of the debt obligation. ...

As noted in paragraph 3.33 of folio S1-F3-C3, whether a support payment is taxable to the recipient and deductible by the payer is determined solely by the Act with consideration of the requirements in the court order or written agreement. ... According to the information you provided to us, the lump-sum payment you were required to make appears to relate to a period before the date of the court order and gives consideration to further adjustments, including a discount for estimated income taxes and a reduction to reflect a claim for occupational rent. ... Unfortunately, privacy considerations do not allow this Directorate to search your file for personal information. ...

The transaction was structured such that the offer consideration consisted only of shares of Acquireco. ... The offer consideration is being held in trust for these minority shareholders by a depository until such time as they come forward and tender their share certificates in exchange for the offer consideration. ...

Position: Question of fact as it depends on the application of section 84.1 and the share and/or non-share consideration received. ... However, in certain non-arm's length dispositions of shares, section 84.1 of the Act could result in either a deemed dividend or a reduction to the paid up capital of any share consideration received. ... Where non-share consideration is received as proceeds, such as cash or a promissory note, the individual may be deemed to have received a dividend. ...

The CRA takes the view that barter transactions are within the purview of sections 3 and 9 of the Income Tax Act (the "Act") for the purposes of determining whether an amount has been paid as consideration for goods or services. In your situation the value of the waived condominium fees would be viewed as consideration received by the Treasurer for the services rendered and would therefore constitute income. Generally, an amount paid to an individual as consideration for services rendered will be taxable either as income from an office or employment or as income from a business depending on the particular circumstances. ...

1 December 2009 External T.I. 2009-0323331E5- Volunteer Compensation Unedited CRA Tags 5(1) Principal Issues: Whether consideration received by a volunteer is taxable under the Income Tax Act. ... Reasons: When consideration is nominal and unlikely to ensure the provision of services, and does not represent the FMV of the services, there may be no tax implications. ... In other words, nominal consideration is unlikely to be enough to ensure the provision of services by the volunteer and does not reflect the fair market value of the services rendered. ...

Under common law, a gift is a voluntary transfer of property without valuable consideration. Generally, for purposes of sections 110.1 and 118.1, a gift under common law is made if a taxpayer has donative intent and all three of the following conditions are satisfied: there must be a voluntary transfer of property to a qualified donee; the property transferred must be owned by the donor; and no benefit or consideration must flow to the donor. ... Yours truly, Jenie Leigh Manager Financial Institutions Section Financial Industries and Trusts Division Income Tax Rulings Directorate Legislative Policy and Regulatory Affairs Branch FOOTNOTES Note to reader: Because of our system requirements, the footnotes contained in the original document are shown below instead: 1 Note that the meaning of gift under common law is modified under subsection 248(30), which allows for the recognition of a gift for tax purposes by a taxpayer in certain circumstances even though some form of benefit or consideration flows back to the taxpayer. ...

Among other things, paragraph (n) of that definition (“Paragraph N”) excludes a cancellation of a share of the capital stock of a corporation (referred to in that paragraph as the “issuing corporation”) held by another corporation (referred to in that paragraph as the “disposing corporation”) if the cancellation occurs as part of a “foreign merger” (within the meaning assigned by subsection 87(8.1)) of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in that paragraph as the “new corporation”), provided the disposing corporation receives no consideration for the share other than property that was, immediately before the merger, owned by the issuing corporation and that, on the merger, becomes property of the new corporation. ... In our view, while Paragraph N would apply to the cancellation of the shares of FA3 held by FA2, because FA2 would receive no consideration for the shares of FA3, Paragraph N would not apply to the cancellation of the shares of FA2. ... In these circumstances, it is our view that the property of FA3 would be received by FA1 as consideration for the shares of FA2. ...

Canco B transfers all the shares of Foreignco 2 that it owns to Foreignco 1 for the sole consideration of the shares of Foreignco 1. ... The pre-amble of subsection 85.1(3) of the Act states: "Where a taxpayer has disposed of capital property that was shares of the capital stock of a foreign affiliate of the taxpayer to any corporation that was, immediately following the disposition, a foreign affiliate of the taxpayer (in this subsection referred to as the "acquiring affiliate") for consideration including shares of the acquiring affiliate... ... Third, the consideration received by the taxpayer must include shares of the acquiring affiliate. ...

Generally, where a transfer of property is made by a corporation to its shareholders for no consideration or for consideration less than the fair market value, then a benefit equal to the difference between the fair market value of the property at the time of transfer and the consideration received would be included in the income of the shareholders, pursuant to subsection 15(1) of the Act. ...