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CRA stated: [Under] Article IV(6)... dividends paid by the ULC... would be considered as being paid to USCo1 and USCo2. Nevertheless, since the ULC is treated as fiscally transparent under the laws of the U.S., pursuant to Article IV(7)(b) of the Treaty, amounts of dividends paid by the ULC shall be considered not to be paid to or derived by a person who is a resident of the U.S. because, by reason of the ULC being treated as fiscally transparent under the laws of the U.S., the treatment of the amount under the taxation law of the U.S. ... Therefore, pursuant to the application of Article IV(7)(b) of the Treaty, dividends paid by the ULC to LLC1 and LLC2 would be considered not to be paid to or derived by a U.S. resident. ...

21 November 2017 CTF Roundtable Q. 15, 2017-0724091C6- Conversion from a US LP to an LLC-- summary under Paragraph 95(2)(f) Summary Under Tax Topics- Income Tax Act- Section 95- Subsection 95(2)- Paragraph 95(2)(f) an LLC resulting from a conversion from a US LLC has high inside and outside basis Where a U.S. limited partnership (USLP) is converted into a U.S. limited liability company (LLC), CRA has commented that the USLP is considered to have disposed of its assets at fair market value (FMV) and the holder of a partnership interest is also considered to have disposed of its interest at FMV. ... The above comments should be considered whenever there is a conversion … to U.S. limited liability partnerships or U.S. limited liability limited partnerships…. … The CRA remains open to … an advance income tax ruling request…. ...

This would have de-suspended the loss but for s. 40(3.5)(c)(i), which applies if the particular corporation which, in fact, disappeared (FA) would be considered to have been “merged or combined” with another corporation (Subco) to “form” a corporation. CRA considered that the loss continued to be suspended: “Merged or combined” encompasses a winding-up or liquidation given inter alia the exclusion, in various provisions listed by it, of a winding up or liquidation from a “merger;” and “Formed” includes an entity in place after a reorganization (for example, a s. 86(1) reorganization), even though no new entity may be formed in the traditional sense- so that Subco was considered to have been “formed” on its s. 88(3) winding-up of FA under a “QLAD.” ...

15 May 2019 IFA Roundtable Q. 4, 2019-0798721C6- 78(1)(b)(ii) deemed loan & thin capitalization-- summary under Subparagraph (a)(ii) Summary Under Tax Topics- Income Tax Act- Section 18- Subsection 18(5)- Outstanding Debts to Specified Non-Residents- Paragraph (a)- Subparagraph (a)(ii) unpaid simple interest that is deemed to be a loan by s. 78(1)(b)(ii) generally is not outstanding debts to specified non-residents Assuming compound interest does not accrue on unpaid simple interest owing by a Canadian corporation to a non-resident creditor for which an agreement under s. 78(1)(b)(ii) was made so as to deem the amount of that simple interest to be a loan, is that deemed loan considered to be included in “outstanding debts to specified non-residents” as defined in s. 18(5)? ... Where compound interest does accrue on unpaid simple interest and s. 78(1)(b)(ii) deems the simple interest to be a loan, is that deemed loan considered to be an outstanding debt to a specified non-resident only when the compound interest has been paid? CRA responded that generally, where s. 78(1)(b)(ii) deems simple interest to be a loan, the amount of the deemed loan would not be considered to be an outstanding debt to a specified non-resident for the purposes of ss. 18(4) and (5) until the compound interest is paid and thereby becomes deductible under s. 20(1)(d). ...

., the work and energy that the individual devotes to the business and the nature of the business itself – so that, the more an individual is involved in the management and/or current activities of the business, the more likely it is that the individual will be considered to be actively engaged. After further noting that the facts here were similar to Example 9 of CRA’s split-income guidelines, CRA indicated that in the current scenario, both the husband and wife could be considered to be actively engaged in the business, even though neither of them reaches the 20-hour threshold in s. 120.4(1.1)(a). It was a question of fact whether the husband and wife could be considered to satisfy the excluded business test for a particular year or continue to meet such test thereafter, as consideration must be given to the ongoing nature and labour requirements of the corporation’s business. ...

Is Father not considered to have made a contribution because the loan qualified as an arm’s length transfer on the basis that “it is reasonable to conclude that none of the reasons … for the transfer is the acquisition at any time by any person or partnership of an interest as a beneficiary under a non-resident trust”.? CRA indicated the quoted words did not establish a test that the beneficiary’s interest must be acquired as a result of the particular transfer being considered and that the definition instead seeks to ensure that there is no connection between the transfer, and the person or partnership that already has an interest in the non-resident trust, or would have such an interest in the future. ... Such a conclusion would be highly unlikely given his relationship to them – so that he would be considered to have made a contribution to the trust, he would be a resident contributor and the trust would be deemed to be resident for the purposes listed in s. 94(3)(a). ...

This loan will not be considered to be a contribution by him (so that it will not cause the trust to be resident for various purposes under s. 94(3)(a)) if it is an “arm’s length transfer,” whose definition relevantly requires that it reasonably be considered “that none of the reasons … for the transfer is the acquisition at any time by any person or partnership of an interest as a beneficiary under a non-resident trust.” ... CRA indicated that such a conclusion would be highly unlikely given his relationship to them – so that his loan would be considered to be a contribution to the trust causing him to be a resident contributor and the trust to come within s. 94(3)(a). ...

Effect of non-deductible policy premium on SIOH After noting that "premiums payable by a taxpayer under a life insurance policy are generally considered to be on account of capital" and referencing "the payment of premiums on the Policy over the period throughout which Opco was a private corporation," CRA stated: The portion of such premiums that contributes to the increase of the cash surrender value of the Policy would be considered to be on hand at the safe income determination time to the extent that it contributes to the accrued capital gain on a share of the capital stock of Opco at that time. … However, the portion of such premiums that does not contribute to the increase of the cash surrender value of the Policy at that time will not be on hand at the safe income determination time and would therefore reduce the amount of safe income that could reasonably be considered to contribute, immediately before the Dividend-in-Kind, to the accrued capital gain on the Opco shares on which that dividend is received. ...

It suggested that the new oil or gas wells would be considered to be a different business, but it stated that the place of production will not by itself determine whether the same business is conducted after the acquisition of control, and its focus was on the “similar properties” test in s. 111(5), as to which it stated that oil or gas from wells located in different provinces would be considered to be a “similar property.” ... However, in technical interpretation 9314945, the CRA opined that where a corporation carries on the business of mining and selling metallurgical coal as well as the business of mining and selling other minerals, income therefrom will be considered to be derived by those businesses from the “sale, leasing, rental or development…of similar properties” for the purposes of subparagraph 111(5)(a)(ii) provided that the other conditions in paragraph (a) are met. ...

If Individual A were on maternity leave throughout 2020, or could not work during that period because of an accident, but thereafter returned to work on the same Involved basis as before, would she be considered to be Involved during 2020? ... CRA responded: The more an individual is involved in the management and/or day-to-day operations of the business, the more likely it is that the individual will be considered to be actively engaged in the business, on a regular, continuous and substantial basis. Similarly, the more an individual's involvement is integral to the success of the business, the more it would be considered important. … Individual A will be absent for her entire 2020 taxation year …. ...