Search - consideration

13 April 2015 External T.I. 2012-0449141E5 F- Usufruct-- summary under Subsection 107(2.1) Summary Under Tax Topics- Income Tax Act- 101-110- Section 107- Subsection 107(2.1) 107(2.1) application to termination of usufruct created for valuable consideration A corporation sold the usufruct respecting a property to an arm’s length third party for use as a secondary residence, while retaining the bare ownership, and with the usufruct ending when the bare owner redeemed the rights belonging to the usufructuary. ... “By reasons of the consideration that the usufructuary was required to pay to the Grantor of the usufruct, the trust is not a personal trust,” so that s. 107(2) did not apply. ...

3 February 2011 External T.I. 2010-0389601E5 F- Allocation de transport-- summary under Business Source/Reasonable Expectation of Profit Summary Under Tax Topics- Income Tax Act- Section 3- Paragraph 3(a)- Business Source/Reasonable Expectation of Profit allowance from school in “consideration” for arranging child transport was non-taxable Under an agreement with the School Board (which previously provided student free transportation), the parent was required to personally arrange for the transportation of the child in consideration for a specified daily sum received from the School Board as a transportation allowance. ...

CRA responded: Under subsection 248(1), a personal trust is defined, among other things, as a trust in which no beneficial interest was acquired for consideration payable directly or indirectly to the trust or to any person or partnership that has made a contribution to the trust by way of transfer, assignment or other disposition of property. … The question of whether the assumption by the beneficiary of the debt of the trust constitutes consideration for the acquisition of a beneficial interest in the trust is a question of fact…. ...

12 January 2009 External T.I. 2008-0293901E5 F- Article 80-- summary under Subparagraph 20(1)(c)(ii) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c)- Subparagraph 20(1)(c)(ii) indirect use test also applies to the extent of eligible capital attributable to shares repurchased in consideration for debt issuance A small business corporation with nominal accumulated profits purchased for cancellation shares in its capital having nominal capital in consideration for the issuance by it of interest-bearing debt. ...

17 April 2007 External T.I. 2007-0230381E5 F- Option d'achat de biens immeubles-- summary under Paragraph 49(1)(a) Summary Under Tax Topics- Income Tax Act- Section 49- Subsection 49(1)- Paragraph 49(1)(a) allocation of option proceeds between principal residence and business asset to be allocated based on the reasonable value attributed to each type of property CRA indicated that where an option was granted on a farm consisting of a principal residence and the farmland: [T]he portion of the consideration received for the option and its extension allocated to the option for the disposition of the principal residence would not form part of the proceeds of disposition included pursuant to subsection 49(1). The allocation of the consideration received for the option and its extension between the portion for the disposition of the principal residence and the portion for the disposition of the farmland could be based on the reasonable value attributed to each type of property in relation to the total value. ...

27 February 2007 External T.I. 2006-0216481E5 F- Montant payable à des retraités (annul ass. malad)-- summary under Subsection 6(3) Summary Under Tax Topics- Income Tax Act- Section 6- Subsection 6(3) compensation for termination of retirees’ benefit plan not includible under s. 6(3) Before finding that the allowance was non-taxable to the recipients as not being income from a source, CRA indicated that they were not taxable under s. 5(1) and also were not taxable under s. 6(3), stating: [T]he payments do not meet the criteria of subsection 6(3), which deals with amounts paid on account of or in full or partial consideration or partial consideration of an obligation between an employer and employee. ...

A of his common shares of Opco by way of purchase for cancellation for Class A preferred shares with a redemption value of $1 million, followed by a common share subscription by his two adult children for nominal consideration. ... A as consideration, Mr. A and Opco would agree to exchange the those Class A preferred shares for an equal number of Class B preferred shares. ...

1 February 2006 External T.I. 2005-0142411E5 F- Don entre vifs- bien agricole admissible-- summary under Paragraph 69(1)(c) Summary Under Tax Topics- Income Tax Act- Section 69- Subsection 69(1)- Paragraph 69(1)(c) words of transfer not determinative as to whether there is a gift or sale for nominal consideration CRA indicated that an individual who donated land to an unrelated couple could be regarded as not dealing with them at arm’s length (stating that “the CRA generally assumes that two parties are not dealing at arm's length in a gift situation”), in which case, the transaction might be viewed as an inter vivos gift (so that the donees had full cost under s. 69)(1)(c)) or as a sale for $1 consideration (in which event, there would be no such cost to the donees). ...

10 April 2003 External T.I. 2002-0170485- Assumption of Debt-- summary under Paragraph 85(1)(b) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(1)- Paragraph 85(1)(b) mortgage otherwise to be assumed on drop-down can instead be assumed in consideration for corporate debt to shareholder Where a corporation owes $100 to the taxpayer, and the taxpayer transfers a property with an FMV of $300, cost to the taxpayer of $200, and encumbered by a debt of $275, then (provided the $100 debt is genuine) the corporation may assume a portion of the $275 debt (e.g., $75) as repayment of that portion of the $100 debt, so that the property may be transferred for an elected amount of $200 (i.e., the consideration described in s. 85(1)(b) will be considered to have been reduced to the elected amount of $200). ...

30 April 2003 External T.I. 2002-0172485 F- LIQUIDATION SOCIETE DE PERSONNES-- summary under Subsection 85(3) Summary Under Tax Topics- Income Tax Act- Section 85- Subsection 85(3) taking back note for receivables transferred under s. 22 rather than s. 85(2) precludes s. 85(3) application to wind-up A partnership disposed of all of its capital property to the corporation pursuant to s. 85(1) in consideration for the assumption of debt and for shares, except that it transferred its accounts receivable in consideration for a demand note and elected to s. 22. ...