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7 October 2016 APFF Roundtable Q. 11, 2016-0652941C6 F- Contrat de location / Capital lease-- summary under Small Business Corporation Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Small Business Corporation FMV of rights under a lease must be included Is the asset recorded in the financial statements as a capital lease considered as an asset used in an active business for purposes of the definitions of a qualified small business corporation share or of a small business corporation? ... To determine whether or not the rights in a lease are an asset used principally in an active business carried on by the corporation, the use of the property which is the subject of the lease must be considered. ...

-dollar debentures (where the underlying shares have appreciated even if the U.S. dollar has appreciated) being considered to have realized a loss. Does CRA agree that an issuer could be considered to realize a loss on the conversion? ...

-sourced A Canadian resident and U.S. citizen who settled a revocable living trust for him and his family, is considered for U.S. purposes to be earning the U.S. ... In particular, the income received by him would be considered to have a U.S. source on general principles, given that s. 94(3) would not deem the trust to be resident in Canada for s. 108(5) purposes. ...

However, in a case where an amount paid to Publico by the LLC could be considered a reimbursement of its initial subscription under its relevant constituting documents, the amount paid would be considered a reduction in the paid-up capital rather than a dividend for purposes of the Act. ...

If the payment was considered a gift to the RRSP, it would not be deductible but would be included in the calculation of Part X.1 tax on excess contributions. ... However, no receipt should be issued where the payment is considered a gift to the RRSP. ...

7 October 2020 APFF Roundtable Q. 7, 2020-0852191C6 F- Capital dividend and series of shares-- summary under Subsection 83(2.1) Summary Under Tax Topics- Income Tax Act- Section 83- Subsection 83(2.1) s. 83(2.1) “should be considered” where one of the main purposes of a reorganization is to stream capital dividends CRA confirmed that since s. 248(6) requires a series of shares to be treated as a separate class, a capital dividend could be paid by a private corporation to the holders of only one of the series of shares of a class. ... CRA, in its response, added: Furthermore … if it were the case that certain reorganizations or conversions of shares carried out through a transaction, or as part of a series of transactions, one of the main purposes of which is to enable shareholders to receive capital dividends, then the application of subsection 83(2.1) should be considered ...

CRA indicated that as long as the election is filed with the trust’s income tax return for its first taxation year throughout which it is deemed to be resident in Canada and in which it holds property that is part of its non-resident portion, the election would not be considered to be filed late even if the trust return for that year is filed late. Where the election is not included with the income tax return filed, the election is considered late. ...

28 May 2015 IFA Roundtable Q. 3, 2015-0581511C6- IFA 2015 Q.3: Entity Classification-- summary under Section 96 Summary Under Tax Topics- Income Tax Act- Section 96 status of LLLPs as partnerships or corporations Does CRA still follows the "two-step" approach to entity classification, and what new entities are being considered? ... This analysis has also led us to consider the status of "limited liability partnerships" ("LLPs") governed by the laws of Florida. … [T]these entities have many characteristics in common with "limited liability companies" ("LLCs") that exist in the U.S., which are generally considered to be corporations for the purposes of the Act, but that they also have many characteristics in common with the various forms of partnerships.... ... [W]e wonder whether these two factors…should be considered to be so significant that these entities should be classified as corporations for Canadian tax purposes. ...

(a) After noting that the position in IT-286R2, para. 6- that the income earned in the first 12 months of the estate will be considered payable to the beneficiaries, even though the estate is still under administration and the beneficiaries are not able to enforce payment of such income, provided that none of the beneficiaries object to such treatment- only applies to the executor’s year, CRA stated: That is to say, where the only reason that an amount of income is not payable to the beneficiaries is that it was earned in the initial 12 months of the estate, the income can be considered payable to the beneficiaries provided that all beneficiaries agree to such treatment. ... [T]he [above] treatment … which allows income in the executor’s year to be considered as payable to the beneficiaries (if all of the beneficiaries agree to the treatment) relates only to situations where the estate has not been wound up in the executor’s year such that the estate administration continues beyond the first year. ...

Before indicating that such proceeds would be added to the capital dividend account of the corporation as amounts received by it, CRA stated: A trustee can reasonably be considered to act as agent for a beneficiary when the trustee has no significant powers or responsibilities, the trustee can take no action without instructions from that beneficiary and the trustee's only function is to hold legal title to the property. In order for the trustee to be considered as the agent for all the beneficiaries of a trust, it would generally be necessary for the trust to consult and take instructions from each and every beneficiary with respect to all dealings with all of the trust property. ...