Search - consideration

As consideration, the Husband would pay for the Securities using cash, in-kind consideration or a loan at the CCRA prescribed rates. ... If the election is made and fair market value consideration was received by the transferor, subsection 74.5(1) of the Act provides that the gain or loss from a disposition of the property by the spouse will not be attributed to the taxpayer in any year in which the spouse subsequently disposes of the property. ...

Less than two years later, the friend "purchased" the home for consideration of the outstanding balance of the mortgage, $7,000 and the amount of a number of mortgage payments that were missed. ... Approximately one-and-one-half years later, your friend purchased the home from you and your wife for consideration of the outstanding balance of the mortgage, the amount of mortgage payments that he missed and $7,000. ... Your stated concern is that the proceeds of disposition will be considered to be $155,000 instead of the actual consideration that you received as described above. ...

Canco can establish that throughout the period in the year under consideration, more than five Leaseco employees or the equivalent of more than five Leaseco employees are employed full time in the active conduct of Leaseco's real property development or leasing business utilising property owned by Leaseco. 7) When certain other U.S. real properties were acquired, a new Ownerco was incorporated by Holco to hold the property in respect of each such acquisition. ... Leaseco employees perform the following functions on behalf of each Ownerco: a) preparing detailed investment policies, b) finding and investigating real estate investment opportunities, c) negotiating major leases and approving all others, d) attending meetings pertaining to Ownerco business, e) arranging for the acquisition of Ownerco investments by co-ordinating and supervising the acquisition, f) investigating and hiring property managers, g) inspecting each property owned by the Ownerco's at least quarterly, h) preparation of quarterly financial reports for each Ownerco, i) negotiating with lending institutions and mortgage brokers, j) advising on and co-ordinating the disposition of properties including the selection of sales agents, k) dealing with auditors, accountants and counsel, l) general supervision to ensure all debts are serviced and taxes, insurance and maintenance payments are made, m) general supervision of all persons rendering services for property owned by each Ownerco, n) operating bank accounts in the Ownerco's name for the purpose of receiving and making payments relating to the Ownerco's business, and o) maintaining books of account of all receipts and disbursements by each Ownerco. 9) Leaseco will receive a fee from the Ownercos the aggregate amount of which will reflect Leaseco's contribution to earning of the profits of the particular Ownerco's business and will therefore in general, be equal to or greater than an arm's length fee and not less than the cost to Leaseco of compensation paid or accruing to the employees that performed the services. 10) Subject to the application of subparagraph 95(2)(a)(i) of the Act, all the income of each Ownerco for the period in the year under consideration is income from property (i.e. the property referred to in paragraph 7 above). 11) If all the property of all the Ownerco's were transferred into Leaseco, all the income of Leaseco could be considered to derive from a single active real estate development and leasing business. Our Comments Provided that Canco establishes that Leaseco has an active real estate development and leasing business with respect to property owned by Leaseco throughout the period in the year under consideration and is also able to establish that the facts set out in paragraphs 7 and 8 above are accurate, it is our view that in the above circumstances, the income from property of each Ownerco in respect of that period would be included in its income from an active business pursuant to subparagraph 95(2)(a)(i) of the Act. ...

Under the common law, "a gift is a voluntary transfer of property owned by a donor to a donee, in return for which no benefit or consideration flows to the donor" (The Queen v Friedberg, [1992] 1 CTC 1, 92 DTC 6031 (FCA)). 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. The amount of the advantage is defined as the total value, at the time the gift is made, of any property, service, compensation, use or other benefit that the taxpayer obtained, received or enjoyed as consideration for, in gratitude for or in any other way related to the gift. ...

In connection with the FTS offering, the Issuer may retain an underwriter (an “Underwriter”) to assist it with finding Investors to participate in the Issuer’s FTS offering and to provide other related services, in consideration for which the Issuer will pay the Underwriter a fee which may be in the range of 3 to 6% of the FTSs subscription price (an “Offering Assistance Fee”). Alternatively, in some circumstances involving smaller FTS offerings, the Issuer may not retain an Underwriter and, instead, the Promoter will agree to assist the Issuer with finding Investors to participate in the Issuer’s FTS offering and the Issuer will pay an Offering Assistance Fee to the Promoter in consideration for that assistance. ... YOUR QUESTION You have asked whether, in a circumstance where the Issuer does not retain an Underwriter in connection with its FTS offering, the payment by the Issuer to the Promoter of an Offering Assistance Fee as consideration for the Promoter assisting the Issuer with finding Investors to participate in the FTS offering and providing other related services, would result in the FTSs issued under that FTS offering becoming prescribed shares within section 6202.1 of the Regulations. ...

On January 2 of Year 11, A and B initiated a divisive reorganization (“Reorganization”) in the course of which the following transactions were undertaken: a) B incorporated a new corporation (“Newco”). b) B disposed of her Opco common shares to Newco in consideration for common shares in Newco. c) Opco disposed of a portion of the Business Property to Newco in consideration for preferred shares in Newco. d) The shares that Opco and Newco held into one another were cross-redeemed in consideration for the issuance of a non-interest bearing promissory notes (“Notes”), and e) The Notes will be extinguished by way of legal set-off. 5. ...

Paragraph 84.1(1)(a) of the Act provides, in certain circumstances, for a paid-up capita lreduction for each class of the shares of a purchaser corporation from which shares were issued as consideration for its acquisition of the shares of another corporation. Where no shares of the purchaser corporation are issued as consideration for the shares acquired by it, this provision would not be applicable.      Paragraph 84.1(1)(b) of the Act, in certain circumstances, treats a purchaser corporation as having paid a dividend to the transferor of the shares it has acquired where the aggregate of the amount of the increase in the legal paid-up capital of its shares arising as a result of the share transfer and the fair market value of the non-share consideration given by it for the transferred shares exceeds the total of (a)     the greater of  the adjusted cost base, as modified under paragraph 84.1(2)(a) or (a.1), to the transferor of the transferred shares and the paid-up capital of the transferred shares, and (b)     the total paid-up capital reductions required by paragraph 84.1(1)(a) to be made by the purchaser corporation.       ...

A transfers his beneficial interest in the real estate he owns to A Corp and as sole consideration therefor receives redeemable and retractable special shares having an aggregate fair market value and redemption amount of $100. ... B transfers his beneficial interest in the real estate he owns to B Corp and as sole consideration therefor receives redeemable and retractable special shares having an aggregate fair market value and redemption amount of $100. ... It is your view that paragraph 85(1)(e.2), as amended under the Draft Amendments to the Income Tax Act and Related Statues issued by the Minister of Finance on July 13, 1990, would not apply to the transfers of the real estate by the individuals to their respective corporation even though the respective consideration that is received by them has an aggregate fair market value less than the fair market value of the transferred property. ...

Quoiqu'elle soit un facteur important, la superficie d'un élément d'actif utilisé directement dans une entreprise active n'est pas le seul critère devant être pris en considération.  Par exemple, la juste valeur marchande de la partie de l'élément d'actif qui est utilisée dans l'entreprise exploitée activement pourrait également être prise en considération. Dans une situation comme celle que vous nous avez présentée où nous sommes en présence d'un bien détenu en copropriété indivise, nous sommes d'avis qu'il faille prendre en considération le fait que chaque copropriétaire détient une part indivise dans chaque partie de l'immeuble.  ...

In other words, the amount or value of the benefit conferred where corporate owned property is made available to a shareholder would generally be considered to be equal to the fair market rental of that property less any consideration paid by that shareholder with regard to the property. As noted in that response, however, where this approach is not appropriate for measuring the value of the benefit, e.g., if it does not provide a reasonable return on the cost or value of the property, the benefit would generally be determined with reference to a normal rate of return on the greater of the cost or fair market value of the property, plus the related operating costs but reduced, as above, by any consideration paid by that shareholder with regard to the property. ... This response was given in the specific context of residential real property located in the U.S. which is held by a Canadian corporation for the occupancy of its shareholder and indicated that a benefit otherwise arising (where the fair market rental of the property exceeded the consideration paid by the shareholder) would not normally be assessed provided all the conditions given therein were satisfied. ...