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If the amount cannot be paid in accordance with the terms of the trust and the relevant trust law, the amount cannot be considered to have become payable for the purposes of subsections 104(6) and (13) of the Act. ...

It is a question of fact but generally would be considered as a business income. 3. ...

Reasons: 1 – Income distributed by a trust resident in Canada is eligible for reduced Part XIII withholding under Article XXII of the Canada-United States Convention when no other article of the convention applies. 2 – Income distributed from a trust resident in Canada is eligible for reduced Part XIII withholding under Article XXII of the Canada-United States Convention when no other article of the convention applies. 3 – Payments from RRSPs and RRIFs are considered pensions under the Canada-United States Convention, so Article XXII does not apply to these payments. ...

We would like the CRA's opinion in the four preceding scenarios as to whether or not the source of the funds must be considered in order to determine the existence or not of an arm's length relationship between Mr. ... That situation appears to be the same as described in scenario a) and we continue to be of the view that this element must be considered in determining whether or not Mr. ...

Question a): In situation 1, following its acquisition by the individual, whether the corporation would still be considered not to be a CCPC for the purposes of paragraph 125(7)(d)? ... Questions a) In situation 1, can the CRA confirm to us that following its acquisition by the individual, the corporation would still be considered not to be a CCPC for the purposes of paragraph 125(7)(d) of the ITA? ...

The entitlement to safe income hinges on whether the income earned or realized could “reasonably” be considered to contribute to the accrued gain on the shares,[FN: In The Queen v. Nassau Walnut Investments Inc. 97 D.T.C. 5051 (FCA), the court agreed with the following submission by the crown: “assuming that the other requirements of that provision are satisfied, so long as the approach taken by the Minister in allocating safe income is reasonable, subsection 55(2) should apply regardless of whether the method chosen by Nassau could also be considered reasonable.”] the theory being that the income earned or realized by the corporation could somehow contribute to the increase in the value of the shares and, since such income earned or realized has already been subject to tax, a dividend paid by the corporation that reduces the portion of a capital gain on a share that represents such increase should not be subject to additional tax. ...

The CRA is disposed to issue advanced income tax rulings on this question after having considered all the relevant facts. ... Furthermore, it should be noted that, unlike related persons, when it is established that non- related persons are not dealing with each other at arm's length, no subsequent examination can make it possible for these persons to be considered to be acting at arm's length under paragraph 5(3)(b) of the EIA. ii) Under paragraph 5(2)(b) of the EIA, a taxpayer does not occupy an insurable employment in the service of a corporation, if he holds more than 40% of the voting shares of the corporation. ...

b) If the attributed income retains its nature, how the CRA expects the tax practitioners to prepare and file the T3 Trust Income Tax and Information Return and the T3 Statement of Trust Income Allocations and Designations ("T3 Statement") in order to ensure that the rental income is considered in calculating the taxpayer's "RRSP deduction limit" under subsection 146(1)? ...

POSITION: In the particular situation, if the hypothetical capital gain on Class A common shares held by Holdco A, computed pursuant to the assumptions of paragraph 55(2.1)(c) is more than $20,000, safe income on hand of $20,000 would be considered to contribute to the hypothetical capital gain on Class A common shares, that is the safe income accumulated by Opco since Holdco A holds the Class A common shares. ...

An adjustment to Schedule 1 of the corporation return of income will need to be considered in order to reconcile the net income of the corporation per the financial statements with the net income for income tax purposes for the fiscal period during which the change takes place. ...