Search - consideration

The sole fact than an employee is beneficiary under an EPSP does not constitute consideration payable to acquire an interest in the EPSP. 5-943213 XXXXXXXXXX G. ... A personal trust, as defined pursuant to subparagraph 248(1) of the Act, includes an inter vivos trust in which no beneficial interest was acquired for consideration payable to the trust or to any person who has made a contribution to the trust. ... However, in our view, the sole fact that an employee is a beneficiary under an EPSP due to his employment does not constitute consideration payable to the employer to acquire a beneficial interest in the said EPSP. ...

Position: No position taken Reasons: Issue is under consideration by TSO XXXXXXXXXX 2000-002232 Wayne Antle December 18, 2000 Dear XXXXXXXXXX: Re: Purchase of Computers with Professional Development Funds This is in response to your letter dated April 14, 2000 concerning whether the purchase of computers with professional development funds for the use of administrative officers ("AO's") would be included in the income of the AO's as a taxable benefit from employment. It is our understanding that this issue has been under consideration by the XXXXXXXXXX Tax Services Office. ... As discussed, we will not comment on transactions that are under consideration by a tax services office, unless we are asked to do so by a field office. ...

We assume that you and your wife would acquire the shares of the Corporation directly from XXXXXXXXXX in consideration for a promissory note having a principal amount equal to the fair market value of the shares of the Corporation. ... In essence, section 84.1 of the Act will not have any immediate incidence if the amount of the non-share consideration and/or the paid-up capital of the shares received by you and your wife in consideration for the shares of the Corporation does not exceed the greater of the paid-up capital and the adjusted cost base of the Corporation shares. As described in paragraph 8 of IT-489R, paragraphs 84.1(2)(a) and 84.1(2)(a.1) of the Act provide rules for determining the adjusted cost base of Corporation shares for the purposes of determining the maximum non-share consideration or paid-up capital that you and your wife could receive from Holdco as consideration for the disposition of shares of the Corporation without any incidence under section 84.1 of the Act. ...

A”) for nominal consideration. Subsequent to the issuance of the Class B preferred share to Mrs. ... A for nominal consideration and the payment of any discretionary dividends on the Class B preferred shares. ... A as consideration for the share does not represent the fair market value of such share at the time of subscription. ...

If the PAC operates to reduce the redemption amount, the condition stipulated in the mid-amble of subsection 191(4), that the specified amount does not exceed the FMV of property received as consideration on the issuance of the shares, will not be met. ... The specified amount would equal, but would not exceed the fair market value of the consideration for which the shares are issued and the consideration received for the issuance of the shares would not include a taxable preferred share. The terms and conditions of the shares also separately contain a PAC in respect of the redemption price of the shares, based on the fair market value of the consideration for which such shares were issued. ...

Principal Issues: If the taxpayer receives a demand non-interest bearing promissory note as consideration for property transferred to a spousal trust, will the adjusted cost base of the promissory note be equal to the stated value of the note (which should also be equal to its fair market value)? ... Your view- Questions 1 and 2 You are of the view that subsection 73(1) will continue to apply since subsection 73(1) does not preclude a taxpayer from receiving a note or similar debt instrument as consideration for the transferred property. ... In our view, this provision applies whether or not the taxpayer receives a promissory note or other consideration for the property transferred. ...

However, you also indicate that the preferred shares issued by Holdco as consideration had a paid-up capital equal to their fair market value. ... For example, under the former version of paragraph 84.1(1)(a), where the consideration paid by the purchaser corporation included only shares of the purchaser corporation and cash, an immediate capital gain could arise on the disposition of the shares of the subject corporation. ... Similarly, for example, under the former version of paragraph 84.1(1)(b), where the consideration paid by the purchaser corporation included only shares of the purchaser corporation, a reduction in the adjusted cost base of a purchaser corporation's shares could arise. ...

As you noted, the Department has previously stated that where a shareholder acquired an interest in a life insurance policy from a corporation for consideration that was less than the fair market value ("fmv") of the policy, the excess of the fmv over the consideration paid by the shareholder, if any, would be included in the shareholder's income pursuant to subsection 15(1) of the Act. ... It seems rather inappropriate that an interpretation intended to provide an equitable result under the Act should be extended to apply to situation where a shareholder acquires an interest in a policy from a corporation for no consideration and argues that the full amount of the subsection 15(1) income inclusion (i.e., the fmv of the policy), rather than the excess as described above, be added to an acb of the policy. ... Accordingly, without further consideration we are unable to express a view as to the income tax consequences determined by you with regard to the various scenarios set forth in your letter. ...

Principal Issues: Would interest continue to be deductible after a subsection 86(1) reorganization, where the fair market value of the original shares has declined and the consideration taken back on the reorganization reflects this declined value? ... You describe a hypothetical subsection 86(1) share for share exchange, where the original shares have declined in value and the shares received as consideration for the original shares have a fair market value which is less than the remaining amount of the loan initially taken out to acquire the original shares. No non-share consideration is received as part of this arrangement. Without having all the facts in your particular situation, we are unable to comment on the continuing deductibility of interest expense incurred on the loan after the exchange of shares has occurred. ...

No valuable consideration- no benefit of any kind- to the donor or to anyone designated by the donor may result from the payment" (paragraph 3 of IT-110R2). Unlike other teaching or training, religious training is not viewed as consideration for purposes of the definition of a gift 962770 XXXXXXXXXX A.M. ... No valuable consideration- no benefit of any kind- to the donor or to anyone designated by the donor may result from the payment. ...