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26 April 2017 IFA Roundtable Q. 9, 2017-0691201C6- Computation of Earnings for LLCs-- summary under Subparagraph (a)(iii) Summary Under Tax Topics- Income Tax Regulations- Regulation 5907- Subsection 5907(1)- Earnings- Paragraph (a)- Subparagraph (a)(iii) CRA’s new position, that LLCs generally must compute their income under ITA rather than Code rules, need not be applied for surplus calculations for pre-2016 years At the November 30, 2016 CTF Annual Conference, CRA has changed its 2009 view, and now considered that where a foreign affiliate is a disregarded U.S. ...

What is reasonable or not in the circumstances remains a question of fact that can only be made once all the relevant facts of a particular situation are known and have been fully considered. ...

13 June 2017 STEP Roundtable Q. 2, 2017-0693321C6- GAAR and 21-year planning-- summary under Subsection 245(4) Summary Under Tax Topics- Income Tax Act- Section 245- Subsection 245(4) abusive distribution of trust property to corporate beneficiary to defer gain for lifetimes of current beneficaries At the 2016 CTF Roundtable, Q.1, CRA considered that it generally would consider it to be an abusive circumvention of the rule for the realization by a trust of gains on its 21st anniversary (and of the related anti-avoidnace rule in s. 104(5.8)) to distribute the property of a discretionary trust to a corporate beneficiary who was owned by a new discretionary trust. ...

13 June 2017 STEP Roundtable Q. 3, 2017-0693451C6- Dual-resident estate and Article (IV)-- summary under Article 4 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 4 double tax, not dual trust residence, generally will be addressed The estate of a deceased U.S. citizen may be considered a U.S. estate under U.S. domestic law, and also a Canadian resident estate under the ITA central management and control test or s. 94. ...

On the other hand, if the shares were acquired under or as a consequence of the will rather than under the shareholders' agreement, subsection 248(8) would apply and the shares would be considered transferred as a consequence of the father's death. ...

Accordingly, the loss realized on the disposition of the debt obligation resulting from the premium on the disposition of the obligation (at maturity or on assignment) will be considered a capital loss. ...

On the other hand: [W]here a financial institution lends money on commercial terms to an individual that is a shareholder of a corporation, the corporation provides a security interest in its property to the lender, and such property can only be used in the event of default on the loan as a means of repaying amounts owing by the debtor under the lending agreement, then the security interest would not ordinarily be considered a “specified right”. ...

CRA considered such a circular calculation to be contrary to the scheme of s. 55(2), that for a dividend to be subject to s. 55(2), based on a Part IV tax refund, such refund must be a real refund of real tax (as per Ottawa Air Cargo) and that the right approach is for Holdco to declare $153,333 of Part IV tax in its initial return and, in a second return, show the Part IV tax paid for the taxation year as unchanged, even though the amount of the dividend received has been reduced by the application of s. 55(2). ...

6 October 2017 APFF Financial Strategies and Instruments Roundtable Q. 1, 2017-0705221C6 F- Property transfers- common law partners in Québec-- summary under Paragraph 73(1.01)(b) Summary Under Tax Topics- Income Tax Act- Section 73- Subsection 73(1.01)- Paragraph 73(1.01)(b) rollover under common-law partners' separation agreement irrespective of whether technically they have separation rights to settle Respecting the rollover under ss. 73(1.01)(b), 146(16) and 146.3(14) provide to a common-law partner or a partner plan pursuant to a written separation agreement governing the division of the common-law partners’ assets in settlement of their rights arising on the breakdown of their relationship, CRA considered that, although there is no right in Quebec arising out of a common-law partnership (as per Éric v. ...

Thus, the Partnership would be considered to be the taxpayer for the purposes of paragraph 13(38)(d). ...