Search - consideration

In 2019, Opco (which did not carry on a services business) redeemed its shares held by Investco in consideration for an interest-bearing term note. ...

Five years later, after the FMV of the interests in Grainco have appreciated to $1.5 million and such interests continue to qualify as interests in a family farm partnership, A (and then B several days later) transfers his or her partnership interest in Grainco to a newly-incorporated corporation (“Holdco,” or "Managementco")- in which each of A and B holds common shares with an ACB of $50) in consideration for a note receivable of $750,000 and claims the capital gains exemption. ...

16 November 2011 External T.I. 2011-0423861E5 F- paragraph 53(1)b)-- summary under Clause (a)(i)A) Summary Under Tax Topics- Income Tax Act- Section 89- Subsection 89(1)- Capital Dividend Account- Paragraph (a)- Subparagraph (a)(i)- Clause (a)(i)A) example of capital gain for CDA purposes being less than the s. 40 capital gain Holdco, whose common shares of Opco have a nominal adjusted cost base ("ACB") and paid-up capital ("PUC"), a fair market value ("FMV") of $2 million and safe income on hand ("SIOH") attributable to those shares of $900,000, increases the PUC of those shares by $1 million, and transfers those common shares (or to be more precise, new common shares issued in replacement therefor on the PUC increase) to Opco for cancellation in consideration for the issuance by Opco of (i) preference shares of Opco having an FMV, PUC and ACB (determined under s. 85(1)(g)) of $1 million; and (ii) common shares having a FMV of $1 million and nominal PUC and ACB. ...

CRA responded (before adding cautions): [W]e assume that the redemption value of the preferred shares of Divco is equal to the fair market value of the consideration received by Divco upon the issuance of the shares. ...

(a) of the definition (referring to “real … property situated in Canada”), CRA first indicated: The determination of whether or not an object has become a fixture requires consideration of the degree of annexation and the purpose of annexation. ...

The Holdco 2 preferred shares held by Holdco 1 are redeemed in consideration for Holdco 2 assigning Newco A Promissory Note. ...

In 2019, Opco (which did not carry on a services business) purchased for cancellation its shares held by Investco in consideration for an interest-bearing term note (the "Note"), after which, C-3 Trust held 80 out of the 100 non-voting common shares of Opco, as well as 80 voting preferred shares of Opco. ...