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2020 Ruling 2020-0860231R3- Post-mortem planning-- summary under Paragraph 88(1)(d.3) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(1)- Paragraph 88(1)(d.3) bump applied to amalgamation occurring in a pipeline transaction CRA ruled on pipeline transactions respecting common shares of Opco which the deceased held on death, in which: the estate transfers its common shares of Opco to the Newco newly-incorporated by it mostly in consideration for a demand note of Newco at least 12 months thereafter, Opco amalgamated with Newco. in connection with the amalgamation, Amalco designates, in its return of income for its first taxation year, an amount under ss. 87(11) and 88(1)(c) and (d) to bump the ACB of land that had been held (as capital property) continuously by Opco from before the date of the death until immediately prior to the amalgamation. the Newco note is gradually repaid over a period of at least one year after the amalgamation, with Amalco continuing to carry on the business. ...

26 October 2020 External T.I. 2020-0856791E5- CEWS- meaning of inflow-- summary under Subsection 125.7(4) Summary Under Tax Topics- Income Tax Act- Section 125.7- Subsection 125.7(4) CRA will not issue rulings or TIs on what is normal accounting practice for CEWS purposes Regarding a question as to the timing of recognition of qualifying revenue, whose definition in s. 125.7)1) referred to the “inflow” of cash, receivables or other consideration arising in the course of the eligible entity’s ordinary activities in Canada, CRA stated: Subsection 125.7(4) enacts that the qualifying revenue of an eligible entity is generally determined in accordance with its normal accounting practices. ...

2017 Ruling 2017-0696791R3 F- Reduction of PUC/capital-- summary under Subsection 51(1) Summary Under Tax Topics- Income Tax Act- Section 51- Subsection 51(1) s. 51(1) will apply where convertible note, that was issued as boot, will be converted to shares Bco will transfer to a newly-incorporated subsidiary (Newco) all its shares of a wholly-owned subsidiary (Cco) on a s. 85(1) rollover basis in consideration for common shares and a demand non-interest bearing promissory note (the "Bco-Newco Note"), which is convertible after a specified period at the holder’s option into Newco common shares with an FMV equaling that of the note. ...

It had acquired such shares as the agreed consideration for issuing shares to the shareholders of a non-resident target under a Delaware merger, and was ruled to have a cost for those shares of Merger Sub1 equal to the FMV of the shares that were so issued by it (together with any related costs incurred by it). ...

This issue is still under active consideration by the CRA. … [C]rypto-assets, by their very nature, are more difficult to track than traditional assets. ...

CRA stated: [T]he CRA would not generally apply subsection 15(1) solely as a result of the granting of a guarantee where the CRA is of the view that the individual pays the individual’s corporation a reasonable guarantee fee as consideration for the individual’s corporation granting a mortgage guarantee of a personal loan of the individual. ...

Following the death of Mother, her estate and Trust were to engage in a pipeline transaction under which: The estate and Trust transfer their Aco shares under s. 85(1) to a Newco of Trust in consideration for Newco preferred shares. ...

Furthermore, the application of the amended section 245 must be in accordance with the object, spirit and purpose of such provision and of the other provisions that are relied upon by the taxpayer as well as, ensure that economic substance receives proper consideration. ...

15 February 2001 External T.I. 1999-0008405 F- Lien de dépendance-- summary under Subsection 84.1(1) Summary Under Tax Topics- Income Tax Act- Section 84.1- Subsection 84.1(1) secured promissory note potentially could give rise to de facto control Y sold his wholly-owned corporation (Yco) to a corporation (Xco) owned by an unrelated individual (X), in consideration for $100,000 in cash (being the only asset of Xco) and an interest-bearing promissory note for $400,000, secured by a mortgage on Yco's property). ...

15 February 2001 External T.I. 1999-0008405 F- Lien de dépendance-- summary under Paragraph 251(1)(c) Summary Under Tax Topics- Income Tax Act- Section 251- Subsection 251(1)- Paragraph 251(1)(c) holding of secured note for 80% of purchaser’s assets potentially could give rise to de facto control Y sold his wholly-owned corporation (Yco) to a corporation (Xco) owned by an unrelated individual (X), in consideration for $100,000 in cash (being the only asset of Xco) and an interest-bearing promissory note for $400,000, secured by a mortgage on Yco's property). ...