(e)-(x)

Paragraph 12(1)(e) - Reserves for certain goods and services, etc.

Cases

Argus Holdings Ltd. v. Canada, 2000 DTC 6681 (FCA)

For accounting purposes the taxpayer, which operated a racquetball club, had brought initiation fees into income over a ten-year period on a...

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Sears Canada Inc. v. The Queen, 89 DTC 5039, [1989] 1 CTC 128 (FCA)

The amount of a s. 20(1)(m) reserve which RC had allowed as a deduction in computing the taxpayer's income in 1975 (a year not subject to appeal)...

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Words and Phrases
deducted

Dominion of Canada General Insurance Co. v. The Queen, 86 DTC 6154, [1986] 1 CTC 423 (FCA)

Stone JA stated (at p. 6163) that the words of s. 85B(1)(e) (now, s. 12(1)(e)) "are directed toward the inclusion in income of an 'amount' that...

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Words and Phrases
deducted under
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) 106

Abed Estate v. The Queen, 82 DTC 6099, [1982] CTC 115 (FCA)

The taxpayer, who was a U.S. resident, did not file any income tax returns on the ground, later established in court to be unfounded, that he was...

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See Also

Dubawn Holdings Inc. v. The Queen, 94 DTC 1252, [1994] 1 CTC 2527 (TCC)

A reserve which the taxpayer had erroneously deducted from income in his 1984 taxation year (which now was statute-barred) was required to be...

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Words and Phrases
deducted

Administrative Policy

IT-73R6 "The Small Business Deduction - Income from an Active Business, a Specified Investment Business and a Personal Services Business".

Reserve claimed against business income is business income when reversed

4. ... If the original gain on the sale of real property was categorized...

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24 March 1995 External T.I. 9507295 - SALE PRICE OF SHARES - CLOSING

Discussion whether an increase in the sale price of shares between the date of an agreement of sale and the closing date represents interest or an...

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Paragraph 12(1)(f) - Insurance proceeds expended

Administrative Policy

16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation

A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (e) compensation for loss of value to lands left after the government agreed to purchase a portion thereof, would constitute proceeds of disposition of such remainder 123
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) compensation paid to land owners for their restoration of the portion of their lands not sold to the government would be a s. 12(1)(x) receipt 122

4 March 2015 External T.I. 2014-0550761E5 F - 44(1) et disposition partielle

A portion of a building was destroyed by fire, with a portion of the insurance proceeds used to reconstruct it. CRA stated (TaxInterpretations...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Former Business Property part of building treated as former business property 165
Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) partial destruction of building 197
Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (f) insurance proceeds received for destruction of part of building: compensation for property damaged rather than destroyed 76

Paragraph 12(1)(g) - Payments based on production or use

Cases

Canada v. Larsen, 99 DTC 5757 (FCA)

The taxpayer and his three siblings gave a lumber company the right to enter their land to remove timber during a five-month period for...

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The Queen v. Mel-Bar Ranches, 89 DTC 5189, [1989] 1 CTC 360 (FCTD)

A timber-sale agreement between the taxpayer (a farmer) and the purchaser provided for the purchase of 25,500 tonnes "more or less" of fir at a...

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Consumers' Gas Company Ltd. v. The Queen, 82 DTC 6300, [1982] CTC 339 (FCTD), aff'd, 84 DTC 6058, [1984] CTC 83 (FCA)

Where the taxpayer was compensated for changing the location of its pipelines it was found that the amounts received were not "dependent upon the...

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Porta-Test Systems Ltd. v. The Queen, 80 DTC 6046, [1980] CTC 71 (FCTD)

A royalty to be received by the taxpayer was calculated as the greater of 5% of the licensee's net sales for the following three years and...

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Lackie v. The Queen, 79 DTC 5309, [1979] CTC 389 (FCA)

Payments received by the owner of a gravel pit, equal to $.20 per ton of gravel removed by the licensee, were amounts that were dependent on the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 74.1 - Subsection 74.1(1) 60

MNR v. Gault, 65 DTC 5157, [1965] CTC 261 (Ex Ct)

An arrangement under which a taxpayer, which had purchased the goodwill of an insurance business of the vendor thereof, including client lists,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Nature of Income 101

Gingras v. MNR, 63 DTC 1142, [1963] CTC 194 (Ex Ct)

S.6(1)(j) of the pre-1972 Act was found to be applicable to the sale by the taxpayer to a corporation controlled by him of copyright for a fixed...

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Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Reciprocity 106

Minister of National Revenue v. Wain-Town, 52 DTC 1138, [1952] CTC 147, [1952] 2 S.C.R. 377

The taxpayer, which assigned its franchise to supply municipalities with natural gas to another company in consideration for amounts (described in...

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Words and Phrases
royalties

See Also

4432002 Canada Inc. v. The Queen, 2022 CCI 101

The taxpayer, which was owned by an employee (“Huet”) of another company (“Pysis”) and by Huet’s spouse, in May 2009 sold together with...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 184 - Subsection 184(3) s. 184(3) election conditional on settlement of the CDA dispute, was valid 129

Deragon v. The Queen, 2015 TCC 294

Vendors agreed to sell shares for a sale price of $16 million, of which $2 million was payable in subsequent years only if an EBITDA condition...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) sales proceeds reduced by subsequent price adjustment clause but included conditional sales proceeds 480
Tax Topics - General Concepts - Effective Date proceeds reduced by subsequent settlement pursuant to price adjustment clause 205

Smith v. The Queen, 2011 DTC 1332 [at 1870], 2011 TCC 461

The taxpayer sold the client list respecting his insurance brokerage business for a stipulated dollar sale price (payable in five annual...

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Wright v. The Queen, 2003 DTC 763 (TCC)

The taxpayers and their father had used 430 acres of a 5,700 acre property in Manitoba for farming for many years before farming ceased in the...

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Rouleau v. MNR, 91 DTC 120 (TCC)

On the sale of the taxpayer's chartered accountancy practice, it was agreed that the sale price for the goodwill would be 20% of gross fees earned...

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289018 Ontario Ltd. v. MNR, 87 DTC 38, [1987] 1 CTC 2095 (TCC)

The proceeds from the sale by the taxpayer of a technological equipment business consisted of a fixed cash payment and further cash payments...

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Brosseau v. MNR, 86 DTC 1412, [1986] 1 CTC 2558 (TCC)

The taxpayer sold his accounting practice for a price equal to 20% of gross revenue received from his former clientele over the following five...

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Pacific Pine Co., Ltd. v. MNR, 61 DTC 95 (TAB)

S.6(1)(j) of the pre-1972 Act did not apply where the taxpayer sold a timber licence for a purchase price payable in 16 quarterly instalments...

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Mr. R. v. MNR, 50 DTC 398 (ITAB)

An agreement for the assignment by the taxpayer to a drug company of the taxpayer's rights under patent to a medicinal preparation in...

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Administrative Policy

29 November 2022 CTF Roundtable Q. 11, 2022-0949761C6 - Earnout Agreement

Earnout based on subsidiary goodwill

One of the conditions provided in IT-426R for application of the cost recovery method (in subpara. 2(c)) is...

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17 May 2022 External T.I. 2021-0884651E5 - Cost Recovery Method in IT-426R (Archived)

The vendor of a minority (capital property) shareholding (under 5%) of a U.S. company (TargetCo) is a limited partnership (“Partnership”) with...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 229 - Subsection 229(1) T5013 return is not a return of income 128
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Canadian Resident Partnership “Canadian resident partnership” is not a person “resident in Canada” 143
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) “Canadian resident partnership” is not a person “resident in Canada” (although it is resident for income computation purposes) 160

7 October 2021 APFF Roundtable Q. 8, 2021-0900981C6 F - Cost Recovery Method in IT-426R (Archived)

Where a limited partnership with resident and non-resident partners sells shares subject to an earnout, it is difficult to comply with paras. 2(e)...

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3 December 2019 CTF Roundtable Q. 12, 2019-0824531C6 - Earnout and Cost Recovery Method

The proceeds of disposition of the shares of Company A are determined pursuant to an earnout clause, which is based on the future earnings...

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2015 Ruling 2015-0589471R3 - Earnout

Background

The corporate Shareholders (with equal shareholdings) of Holdco (a Canadian-controlled private corporation) wish to sell X% of their...

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Words and Phrases
determinable
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Safe-Income Determination Time safe income determination time for a subsequent contemplated dividend was immediately before that dividend 534
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) s. 85(1) rollover available on dirty s. 85 exchange 92
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) utilization of safe income as earned through a contemplated succession of dividends of all the annual earnings 178
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a) transactions for using s. 7 rules on sale of non-treasury shares 212

10 March 2015 External T.I. 2014-0552551E5 F - Vente du droit d'exploiter une sablière

A partnership which owns a "qualified farm or fishing property" sells the right to operate the sand pit to a municipality for a fixed sum. Does a...

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Words and Phrases
profit à prendre
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate application of capital gains criteria on woodlots to sale of rights to extract sand 51
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property sale of rights to extract sand could be considered sale of qualified farm or fishing property 180

12 January 2015 External T.I. 2014-0555071E5 - POD subject to earn-out

In an arm's length sale, the corporate "Vendor" disposes of the "Property" (including land options agreements, permits, engineering data and...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital proceeds of goodwill on sale of wind turbine development project 231
Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Cumulative Canadian exploration expense - Element G proceeds of wind turbine development project 147
Tax Topics - Income Tax Regulations - Regulation 1219 - Subsection 1219(1) wind turbine development project 108

27 August 2014 External T.I. 2014-0529221E5 F - Changement de méthode pour déclarer un gain

Could a taxpayer, who did not use the cost recovery method to report the capital gain on the disposition of shares subject to an earnout agreement...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2) administrative policy on earnout calculation was not an election 128

24 February 2014 External T.I. 2013-0505391E5 F - Clause de earnout renversé

CRA confirmed its position in 2000-0051115 that:

Where the cost recovery method is not used and the sale price of a property is not certain at the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) a sale price that is subject to a reverse earnout is not considered to be payable after the year (no reserve) 195

14 May 2013 External T.I. 2013-0480561E5 F - Méthode de recouvrement du coût

Mr. A holds all the shares of a Canadian-controlled private corporation (Aco), which has a calendar fiscal period and whose only asset is shares...

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20 December 2011 External T.I. 2011-0423771E5 - Payments Based on Production or Use

The position in IT-462, para. 5(c) (respecting the sale of property for a fixed sum plus additional amounts based on production exceeding a...

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23 March 2011 Internal T.I. 2010-0389081I7 F - Disposition of a resource property

The Vendor sold a percentage interest in mineral claims for consideration including shares to be issued by the public-company purchaser, to be...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - cumulative Canadian development expense - Element F proceeds from mineral claims sale included undiscounted deferred cash proceeds, but might exclude share consideration until issued; purchaser’s CEE obligation excluded 390
Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) proceeds included full (undiscounted) deferred cash proceeds, but might exclude share consideration (with volatile market price) until issued 175
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) full undiscounted amount of future cash consideration to be included as an amount receivable 209

9 July 2003 External T.I. 2003-0183675 F - VENTE D'UNE LISTE DE CLIENTS

Three alternative scenarios apply to the sale of the client list of a retiring professional:

1. The sale price will be 25% of the fees earned over...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 24 - Subsection 24(1) loss under s. 24(1)(a) where maximum sales price (equaling FMV) for sold client list is not achieved 194

11 May 2001 Internal T.I. 2001-0072367 - Accrued Royalty Income

Respecting a submission that accrued royalties were not required to be included in the taxpayer's income because they were not received in the...

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20 December 2002 External T.I. 2002-0164735 F - PRODUIT DE DISPOSITION ACHALANDAGE

On a sale of the business of a pharmacist, the consideration for the goodwill sold is equal to the number of prescriptions sold over a 12-month...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital - Variable E full potentially receivable amount must be recognized, notwithstanding subsequent possible downward adjustment 266

30 December 1992 T.I. (Tax Window No. 27, p. 5, ¶2321)

S.12(1)(g) does not apply where the consideration received for the sale of software includes a note the timing of payment of which depends on the...

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2 September 1992 Memorandum (Tax Window, No. 24, p. 17, ¶2222)

The sale of cutting rights for a fixed price for a fixed quantity of timber to be taken within a fixed period of time will not be subject to s....

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IT-462 "Payments Based on Production or Use" 1 January 1995 (Archived)

5. When paragraph 12(1)(g) requires proceeds of dispositions of property to be included wholly or partly as income, subject to 3 above, the...

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IT-426R "Shares Sold Subject to an Earnout Agreement" 26 Ocober 2004 (Archived)

Conditions for use of cost recovery method

2. Taxpayers may use the cost recovery method if the following conditions are met:

(a) The vendor and...

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Articles

Kim Maguire, Jeffrey Shafer, "Trends in Buy/Sell Transactions", draft 2021 Conference Report

Whether s. 12(1)(g) can apply to a share sale (p. 3)

  • Since most contingent consideration for a share sale will relate to earnings or other...

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Warren Pashkowich, Daniel Bellefontaine, "Participation-Based Payments: What Are They and How are They Taxed", 2017 Conference Report (Canadian Tax Foundation), 9:1-25

Whether the referenced property is restricted to property that was sold (pp. 9:9-10)

[T]he the inclusion of the definite article “the”...

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Scheuermann, "Income and Commodity Tax Aspects of Acquiring and Exploiting Technology", 1991 Conference Report, c. 45.

Richardson, "Purchase and Sale of a Business: Income Tax Aspects of Warranties, Price Adjustments and Earn-Outs", 1990 Corporate Management Tax Conference Report, pp. 10:11-10:23.

Paragraph 12(1)(i) - Bad debts recovered

See Also

Beck v. MNR, 92 DTC 1784, [1992] 2 CTC 2085 (TCC)

The taxpayer, which in 1983 had written off a debt owing to it by a corporation ("Brenloc"), in 1984 participated in transactions pursuant to...

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Paragraph 12(1)(j) - Dividends from resident corporations

Cases

Banner Pharmacaps NRO Ltd. v. Canada, 2003 FCA 367, 2003 DTC 5642 (FCA)

The wholly-owned Canadian subsidiary of the taxpayer declared a dividend on its shares, with the resolution stipulating that the dividend was to...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Payment & Receipt promissory note accepted as payment 139
Tax Topics - Income Tax Act - Section 133 - Subsection 133(8) - Non-Resident-Owned Investment Corporation dividend received when note issued/such note not a money-lenidng business 227

Paragraph 12(1)(l.1) - Partnership — interest deduction add back

Administrative Policy

28 July 2015 External T.I. 2015-0567811E5 - Thin cap rules for members of a partnership

Canco (wholly-owned by NRco) and its wholly-owned subsidiary (Canco Sub) hold respective 99.9% and 0.1% interests in the "Partnership," which does...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(7) sale by Cancos of their partnership interests part-way through year did not eliminate their proportionate pick-up of partnership debt 156

Articles

Shane Onufrechuk, Warren Pashkowick, "Tax Considerations of Major Construction Projects", 2014 Conference Report, Canadian Tax Foundation, 10:1-35.

Proxy income inclusion does not boost unit ACB (p. 10:13)

[I]f a corporate partner exceeds the permitted 1.5:1 ratio, interest expense on...

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Paragraph 12(1)(n.2)

Administrative Policy

23 April 2021 External T.I. 2020-0872371E5 - Sabbatical leave plan - Application of SDA rules

After finding that a sabbatical leave plan did not satisfy the requirements of Reg. 6801(a) as a deferred salary leave plan (for multiple reasons...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) offside sabbatical leave plan given length and timing of the sabbatical leave and the notional employer contributions 236
Tax Topics - Income Tax Act - Section 6 - Subsection 6(11) consequences of a sabbatical leave plan being offside the SDA rules 275
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(o) s. 8(1)(o) deduction when employer notional contributions to off-side sabbatical leave plan 161

Paragraph 12(1)(n.3) - Retirement compensation arrangement

Administrative Policy

17 December 2010 External T.I. 2009-0338841E5 - Characterization of Income from an RCA

Are amounts received by an employer on the winding-up of an RCA (where its contributions were deducted in computing its business income) included...

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31 March 1995 External T.I. 9502955 - LETTER OF CREDIT-RCA

"Any amount received by the employer from a custodian as a refund of refundable taxes is included in the employer's income under paragraph...

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Paragraph 12(1)(o)

Cases

Midwest Oil Production Ltd. v. The Queen, 82 DTC 6092, [1982] CTC 107 (FCTD), aff'd 83 DTC 5304, [1983] CTC 338 (FCA)

Because the word "receivable" relates to a change in custody or possession, not to a change in ownership, a royalty obligation to deliver crude...

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Words and Phrases
receivable

Paragraph 12(1)(p)

Administrative Policy

26 June 2014 External T.I. 2014-0523871E5 F - Revenu d'entreprise agricole

Is AgriInvest and AgriStability income support, received by a farmer, farming income or other income to that individual? CRA stated:

The...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming legume germination production as farming 38
Tax Topics - Income Tax Act - Section 12 - Subsection 12(10.2) government contributions and accrued interest in AgriInvest and Agri-Québec accounts are taxable when withdrawn 156

Paragraph 12(1)(r) - Inventory adjustment

Administrative Policy

93 CPTJ - Q.5

The word "obsolescence" in s. 12(1)(r) is considered to refer to an amount respecting obsolescence of fixed assets where such amount is included...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) 29

Paragraph 12(1)(t) - Investment tax credit

Administrative Policy

15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)

The federal apprenticeship job creation tax credit ("AJCTC") is generally included in income under s. 12(1)(t). CRA noted:

Paragraph 12(1)(t)...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) timing of receipt of apprenticeship training tax credit 75

Paragraph 12(1)(x) - Inducement, reimbursement, etc.

Cases

Glencore Canada Corporation v. Canada, 2024 FCA 3

An integrated nickel-mining public company (“Falconbridge”), entered into merger agreements with a more junior public company (“Diamond...

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Words and Phrases
inducement in the course of
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Compensation Payments break fee was a capital receipt 188
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property break fee was not consideration for the disposition of a merger right as there was no such “right” 215
Tax Topics - Income Tax Act - Section 54 - Capital Property break fee was not proceeds of disposition of a capital property 176

Imperial Oil Resources Limited v. Canada (Attorney General), 2008 DTC 6657, 2008 FC 1037

The Alberta government gave the taxpayer a reduction in the royalties it would otherwise have to pay to Alberta on condition that the taxpayer...

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Iron Ore Co. of Canada v. The Queen, 2001 DTC 5411, 2001 FCA 224

The taxpayer made an unsuccessful submission that a refund of Quebec sales tax was not a "refund" described in s. 12(1)(x(iv) because the word...

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Canada v. Canada Safeway Limited, 98 DTC 6060, [1998] 1 CTC 120 (FCA)

In finding that a refund of federal sales tax that predecessors of the taxpayer previously had paid in error did not qualify as a reimbursement...

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Words and Phrases
refund reimbursement
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Timing 35

The Queen v. CCLC Technologies Inc., 96 DTC 6527, [1996] 3 CTC 246 (FCA)

An agreement the taxpayer entered into with the province of Alberta concerning a coal and heavy oil project was found to have resulted in the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance contribution arrangement under which the government could not generate a profit was "other assistance" 130

Westcoast Energy Inc. v. The Queen, 91 DTC 5334 (FCTD), briefly aff'd 92 DTC 6253 (FCA)

Damages which the taxpayer received in settlement of its suit based on the direct and indirect costs incurred by it in replacing a defective pipe...

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Words and Phrases
reimbursement
Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Resolving Ambiguity 84

See Also

Verrier v. Agence du revenu du Québec, 2024 QCCA 298

The taxpayer (Verrier) and other clients of an insurance broker (Chabot) participated in a scheme of Chabot to defraud life insurance companies...

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Tax Topics - Statutory Interpretation - Provincial Law s. 12(1)(x) and Quebec equivalent were to be interpreted similarly 199

Quintal v. Agence du revenu du Québec, 2023 QCCQ 37, effectively overuled in part by Verrier v. ARQ, 2024 QCCA 298

The taxpayer (Quintal) and other clients of an insurance broker (Chabot) participated in a scheme of Chabot to defraud life insurance companies...

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Scotti v. Agence du revenu du Québec, 2019 QCCQ 7579, effectively overruled in part by Verrier v. ARQ, 2024 QCCA 298

An insurance broker (Mr. Chabot) agreed with the taxpayer (Mr. Scotti), as an inducement for Mr. Scotti to acquire a universal whole life policy...

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Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) failure to seek advice on taxability of $90,000 of receipts 371

GMAC Leaseco Corporation v. The Queen, 2015 DTC 1141 [at 908], 2015 TCC 146

General Motors of Canada Limited ("GMC") made "residual value support payments" to the taxpayer ("GMAC"), which purchased vehicles subject to...

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Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.4) amounts replaced reduced lease income rather than contributing to leased vehicles' cost 239
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing capital tax accrued from day to day 226
Tax Topics - Income Tax Act - Section 9 - Compensation Payments payments received in consideration for reducing lease payments were compensation for lost lease income, and s. 9 income 284
Tax Topics - Income Tax Act - Section 9 - Computation of Profit surcharges received by lessor at lease termination for excess use were income 264
Tax Topics - Income Tax Act - Section 9 - Timing inducement payments received by lessor from manufacturer not income until potential repayment obligation quantified 221

Henco Industries Limited v. The Queen, 2014 DTC 1161 [at 3528], 2014 TCC 192

A subdivision property of the taxpayer, a developer, was blockaded by Six Nations protesters. To diffuse the conflict, the Ontario government...

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Tax Topics - General Concepts - Evidence parol evidence rule not applying to surrounding evidence/press releases admitted 239
Tax Topics - General Concepts - Fair Market Value - Land deference to taxpayer's figure within appraiser's range of values 111
Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital payment to withdraw from business was not an eligible capital amount 146
Tax Topics - Income Tax Act - Section 23 - Subsection 23(1) land ceased to be inventory through sterilization rather than business cessation 184
Tax Topics - Income Tax Act - Section 3 compensation payment for destroyed business was non-taxable 171
Tax Topics - Income Tax Act - Section 9 - Compensation Payments compensation payment for destroyed business was non-taxable 171

Immunovaccine Technologies Inc. v. Canada, 2014 DTC 5119 [at 7309], 2014 FCA 196, aff'g 2013 DTC 1101 [at 531], 2013 TCC 103

Under a federal program for fostering Maritimes development, the taxpayer received interest-free advances, which were not characterized as...

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Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance "government assistance" generally encompasses amounts advanced on non-commercial terms 271
Tax Topics - Statutory Interpretation - Ejusdem Generis definition ending in "any other form of assistance" precluded a narrow reading 82

Morguard Corporation v. The Queen, 2012 DTC 1099 [at 2959], 2012 TCC 55, aff'd 2013 DTC 5009 [at 5554], 2012 FCA 306

After finding that break fees totalling $7.7 million received by the taxpayer in an unsuccessful acquisition attempt were fully taxable to it...

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Alberta Power (2000) Ltd. v. The Queen, 2009 DTC 1514, 2009 TCC 412

On the early termination of a power purchase agreement between the taxpayer and the Alberta government, the taxpayer received $59.7 million from...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership person with the benefits and burdens of ownership was the beneficial owner 243
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A 56
Tax Topics - Income Tax Act - Section 9 - Compensation Payments amount was received in respect of impaired capital asset (which then was transferred to payor) rather than for lost profits 111

PSC Elstow Research Farm Inc v. The Queen, 2009 DTC 168, 2008 TCC 694

Research grants received by the parent of the taxpayer were not includible in its income under s. 12(1)(x) to the extent that such assistance was...

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Hudson Bay Mining and Smelting Co., Ltd. v. The Queen, 2003 DTC 173 (TCC)

Tax credits received by the taxpayer from the Manitoba government were in respect of Canadian exploration expenses that it incurred as agent for...

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Coughlan v. The Queen, 2001 DTC 719 (TCC)

Damages received by the taxpayer from a corporation of which he formerly was an officer and shareholder for conspiring to injure his reputation,...

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Bois Aisé de Roberval Inc. v. The Queen, 99 DTC 380, [1999] 4 CTC 2161 (TCC)

A refund of export taxes previously paid by the taxpayer was deemed to be income under the revised version of s. 12(1)(x)(iv), which had been...

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Quincaillerie Laberge Inc. v. The Queen, 95 DTC 155 (TCC)

After finding that $575,000 received by the taxpayer for agreeing to extend the term of a loan for $10,500,000, rather than exercising its rights...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition amendment of agreement did not entail its transfer 142

Hill v. The Queen, 94 DTC 1078, [1994] 1 CTC 2169 (TCC), aff'd 95 DTC 5225 (FCA)

A law firm of which the taxpayer was a member was required to use a portion of the amount paid or to be paid to it as an inducement to sign a new...

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Tyoxide Canada Inc. v. The Queen, 93 DTC 1499, [1994] 1 CTC 2569 (TCC)

A Quebec tax credit, calculated as 10% of the wages of Quebec employees engaged in research activities, was included in income of the taxpayer for...

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Everett's Truck Stop Ltd. v. The Queen, 93 DTC 965, [1993] 2 CTC 2658 (TCC)

The assumption by another corporation ("Polar Oils") of the obligation of the taxpayer to pay $119,658 in consideration for the taxpayer's...

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Words and Phrases
included
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 244 - Subsection 244(14) 96

St. John Dry Dock & Shipbuilding Co. v. MNR (1944), 2 DTC 663 (Ex Ct)

Before concluding that a subsidy received by the taxpayer from the federal government, pursuant to a statute, for the construction of a dry dock...

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Higgs v. Olivier (1952), 33 TC 136 (C.A.)

Before going on to find that a lump sum received by an actor in consideration for his covenant not to exercise his vocation for a period of 18...

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Words and Phrases
in the course of

Administrative Policy

8 September 2023 Internal T.I. 2023-0987091I7 - Trailing Commissions and Dealer Rebates

S. 12(2.1) deems an amount received by a beneficiary of a trust as an inducement in respect of activities of the trust, or as a reimbursement or...

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Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) trailer commissions which are temporarily paid by MFT to OEO dealer for it to fund rebates to client MFT unitholders are s. 12(1)(x) inclusions to MFT 206

28 September 2023 CLHIA Roundtable Q. 2, 2023-0971711C6 - Reimbursement by advisor of policyholder expense

Client B agreed to acquire a life insurance policy from Advisor A, and Advisor A agreed to repay Client B for the accounting fees Client B...

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7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 10, 2022-0938301C6 F - Rebate on purchase of GIC

Normally, on the purchase by a client of a GIC of a bank, the bank would receive the face amount of the GIC (say, $21,000) and pay a broker a...

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Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base broker-waived commission included in cost of GIC 195

16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation

A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction...

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Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (e) compensation for loss of value to lands left after the government agreed to purchase a portion thereof, would constitute proceeds of disposition of such remainder 123
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) compensation for damages to depreciable property would be included under s. 12(1)(f) rather than under proceeds of disposition, but the related repaid expenses would be deductible 126

2 November 2021 External T.I. 2021-0898151E5 - GST/HST Quick Method of Accounting

When qualifying small registrants elect to use the “Quick Method” of accounting for GST/HST obligations, they thereby cease to be entitled to...

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Tax Topics - Income Tax Act - Section 248 - Subsection 248(16) GST/HST Quick Method generally results in a s. 12(1)(x) inclusions, but also increases expense deductions since no s. 248(16) inclusion 187

15 February 2021 Internal T.I. 2021-0879231I7 - Application of paragraph 12(1)(x) to a forgivable

The Regional Relief and Recovery Fund (“RRRF”) provides liquidity assistance for COVID-affected businesses that have been unable to access...

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6 November 2020 Internal T.I. 2020-0865661I7 F - SSUC-moment de l'inclusion au revenu/CEWS-inclusion in income

S. 125.7(3) essentially feeds into s. 12(1)(x) by deeming “CEWS” wage subsidies to be government assistance received immediately before the...

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Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(3) CEWS amounts must generally be included in income under s. 9 or 12(1)(x) by the end of the CEWS periods in question even if not claimed until much later 415

Frequently Asked Questions – Temporary Wage Subsidy for Employers 30 March 2020 CRA Webpage

  • The subsidy equals 10% of the remuneration paid between March 18, 2020, and June 20, 2020, to a maximum of $1,375 per employee and of $25,000 per...

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Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.02) 371

Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019

s. 125.6(2) credit treated as s. 12(1)(x) inclusion

3.21. The amount of the Canadian journalism labour tax credit for a taxation year is...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (b) 146
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(v) 414
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Qualified Canadian Journalism Organization - Paragraph (a) - Subparagraph (a)(vi) 91
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Journalism Organization 335
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Qualifying Labour Expenditure 365
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(1) - Eligible Newsroom Employee 199
Tax Topics - Income Tax Act - Section 125.6 - Subsection 125.6(2) 167
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(1) - Qualifying Subscription Expense 112
Tax Topics - Income Tax Act - Section 118.02 - Subsection 118.02(2) 72
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (b) 188
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (c) 270
Tax Topics - Income Tax Act - Section 253.1 - Subsection 253.1(2) 148
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization - Paragraph (f) - Subparagraph (f)(iii) 143
Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Qualifying Journalism Organization 175
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Registered Journalism Organization 225

12 March 2012 External T.I. 2011-0425361E5 F - Assistance paid by franchisor

A franchisor organizes a contest which is restricted to franchisees. Awards received by a franchisee would be considered to be non-governmental...

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business reimbursements of business expenses increase income 183

26 May 2016 IFA Roundtable Q. 6, 2016-0642081C6 - German Organschafts

Under an “Organschaft,” a German parent (“Parentco”) and its German subsidiary (“Subco”) can enter into an agreement under which Subco...

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Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) profit transfer payments by German sub to its German parent deemed to be dividends under s. 90(2) 319
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(B) profit transfer payments made by a German sub to German parent are s. 90(2) dividends not within s. 95(2)(a)(ii)(B) after 2016 153
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) German profit transfer payment to loss subsidiary is contribution of capital 158

16 February 2016 External T.I. 2015-0618601E5 - Earned or Unearned Revenue

The taxpayer received a lump-sum payment (the “Payment”) from a major supplier (“ACo”) in consideration for entering into a supplier...

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Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(2) no deferral of lump sum received on signing 15-year supplier loyalty agreement 182
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) no deferral for amount included under s. 56.4(2) or 12(1)(x) 126

15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)

The Ontario apprenticeship training tax credit ("ATTC") is generally included in income under s. 12(1)(x). After noting that a tax credit is...

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Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(t) federal apprenticeship job creation tax credit 91

15 September 2014 Internal T.I. 2014-0545001I7 - Grants paid to employers of reservists

Amounts that are received from the Compensation for Employers of Reservists Program by employers of reservists and by self-employed individuals...

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Tax Topics - Income Tax Act - Section 9 - Nature of Income compensation for reservist costs 40

12 September 2012 Annual CTF Roundtable, 2012-0453381C6 - 2012 CICA Conference

An insolvent (but not bankrupt) company negotiates a settlement with CRA of unremitted GST for less than the balance owing. CRA stated that "this...

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Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount tax debt not a commercial debt obligation 113
Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt forgiveness of source deductions on income account 108

21 March 2011 External T.I. 2011-0395011E5 - Deductibility of Ontario SAT

A particular Ontario tax on life insurance corporations ("SAT") is determined as a fixed percentage of the amount by which the corporation's...

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8 October 2010 Roundtable, 2010-0371901C6 F - avantage à l'actionnaire, assurance-vie

Question 2 at the May 4, 2010 CALU Roundtable concerned the situation where (A) Holdco holds an insurance policy on the life of its shareholder,...

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Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) CRA will examine if there is a s. 246(1) benefit where subsidiary is beneficiary of life insurance policy held and paid for by parent 239

4 May 2010 Roundtable, 2010-0359401C6 - Rebate Paid by an Advisor to a Policyholder

In certain provinces, a licensed insurance advisor is permitted to pay a portion of the commission earned as a "rebate" to a client purchasing an...

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Tax Topics - Income Tax Act - Section 148 - Subsection 148(9) - Adjusted Cost Basis - Element A insurance premium rebate paid by broker does not reduce policy ACB 260

11 February 2009 External T.I. 2008-0271381E5 - Commision Rebates

A broker makes a payment to a customer out of the commissions earned from an insurance company, as permitted by legislation of the Insurance...

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6 May 2009 External T.I. 2008-0295581E5 F - Bourses et aide financière aux médecins

Various programs designed to encourage physicians to settle in remote areas of Quebec. Under one such program, financial assistance is granted to...

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Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n) specialized training grants made to unlicensed medical residents to encourage them to settle in remote areas were s. 56(1)(n) fellowships 156

4 July 2007 Internal T.I. 2007-0238391I7 F - Crédit pour stage en milieu de travail

The Quebec tax credit for an on-the-job training period was includible in income under s. 12(1)(x) to the extent that it did not reduce the...

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Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) inclusion under s. 12(2.1) where Quebec job credit received by partnership members 67

2008 Ruling 2006-0217541R3 - Stock Option Reimbursement

A Canadian public company ("Parentco") and non-resident subsidiaries ("Subco1 and Subco2", collectively "Subco") enter into a "Recharge...

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17 February 2006 External T.I. 2005-0153931E5 F - Primes d'installation médecins

Regarding a location incentive program of the Quebec government for medical practitioners setting up in designated territories, CRA...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) signing bonuses to medical practitioners to locate in remote areas are a taxable benefit 95

2004 Ruling 2004-007680

//www.bci.ca/">www.bci.ca): Non-capital losses of BCI are transferred to its affiliate, Bell Canada, pursuant to transactions under which a...

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28 April 2004 Internal T.I. 2004-0066991I7 F - Paiement incitatif

As an incentive for the sale of exempt life insurance policies (having a savings and investment component) a life insurance brokers would pay to...

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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property property “includes practically any type of economic interest” 142
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose per MacIntyre, life insurance premiums are not deductible from business income 192

18 March 2003 External T.I. 2002-0122845 F - CREDIT D'IMPOT POUR LE DOUBLAGE DE FILMS

CCRA indicated that the Quebec tax credit for film dubbing under s. 1029.8.36.0.2 of the Taxation Act (Quebec) is considered to be received for...

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26 July 2001 External T.I. 2001-0083295 - INTERACTION OF QST

A Quebec sales tax input tax refund is included in income under s. 12(1)(x) when received.

25 May 2001 Internal T.I. 2001-008500A - Damage/Compensation Receipts

The receipt in Westcoast Energy Inc. v. The Queen, 91 DTC 5334 (FCTD), affirmed 92 DTC 6253 (FCA) would not be considered to be a "refund,...

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2001 Ruling 2000-003987

Cash receipts of a partnership for assuming contingent liabilities (respecting unfunded supplemental pension and other retirement benefit...

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18 September 2000 External T.I. 2000-0029465 - REIMBURSEMENT ON ISSUING SHARES

Where a Canadian parent is reimbursed by its foreign subsidiary for the difference between the exercise price and the fair market value of shares...

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15 November 1999 External T.I. 9924585 - PREPAID RENT&SALE OF BUILDING

A corporation that has received prepaid rent with respect to a building leased by it to another Canadian corporation then transfers the building...

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Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) prepaid rent on related-party building transfer 33

7 July 1999 External T.I. 9824115 - PROVINCIAL INVESTMENT TAX CREDIT

A provincial investment tax credit is considered to be "received" by the taxpayer at the time it is deducted. Similarly, an investment tax credit...

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5 February 1998 External T.I. 9729535 - ASSISTANCE

Respecting a loan that is repayable out of projected revenues, the Directorate stated that "a loan would be a forgivable loan to the extent that...

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30 November 1996 Ruling 9707693 - INDUCEMENT - SHARE REDEMPTION

The redemption of shares for a nominal amount pursuant to their terms would not constitute an inducement for purposes of s. 12(1)(x) as any...

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29 October 1996 External T.I. 9626325 - BOND OPTIONS

S.12(1)(x) could apply to the receipt by a corporation of a premium for granting an option to require it to issue bonds, depending on the...

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11 January 1996 External T.I. 9526845 - ALBERTA GOVERNMENT ASSISTANCE-SMALL BUSINESS EQUITY

A grant made pursuant to the initial Small Business Equity Corporations Act (Alberta) to a taxpayer for the purchase of venture capital...

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1 February 1994 External T.I. 9332265 F - Inducement

Where the manager of a mutual fund trust rebates a portion of the management fee earned by it directly to investors who have invested substantial...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) MFT management fees rebated by manager to large unitholders produce s. 12(2.1) inclusion 87

1994 A.P.F.F. Round Table, Q. 41

"There may be constructive receipt by a taxpayer when an amount is entered as a credit to his account or, as in Everett's Truck Stop Ltd., that is...

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94 CPTJ - Q. 1

The Alberta royalty tax credit is not included in a taxpayer's income under s. 12(1)(x).

2 December 1993 External T.I. 9321035 F - Taxation of GST and Other Rebates

The Ontario Farm Tax Rebate (entailing a rebate of 75% of property taxes paid on eligible farm land and out-buildings by eligible owners) is...

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5 November 1993 External T.I. 9320085 F - Farm Support Payments

Respecting guarantees by the Province of Saskatchewan of loans made to farmers where the Province did not waive its subrogation rights, the...

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27 October 1993 Income Tax Severed Letter 9319925 - Farm Support Payments

A loan from the Agricultural Credit Corporation of Saskatchewan generally would be regarded as a forgivable loan and, therefore, as assistance "to...

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26 February 1993 T.I. (Tax Window, No. 29, p.17, ¶2440)

A reimbursement or other assistance received in respect of eligible capital property cannot be applied to offset the cost amount of that property...

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10 February 1993 T.I. 921720C (See also 13 January 1993 T.I. 923304)

Amounts paid to Atlantic hog farmers were repayable, except that "if certain conditions subsequent are met they may be forgiven". The Directorate...

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8 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2437)

Credits under the Quebec Mining and Duties Act do not fall within the ambit of s. 12(1)(x).

December 1992 B.C. Tax Executives Institute Round Table, Q.13 (October 1993 Access Letter, p. 481)

It is a question of fact whether a lease cancellation payment received by a tenant would be excluded from the application of s. 12.1(x) by s....

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"Farm Support Payments: A Paper by the Rulings Directorate addressed to Agriculture Canada - 1992" (September 1993 Access Letter, p. 426).

7 November 1992 Memorandum (Tax Window, No. 27, P. 21, ¶2354, October 1993 Access Letter, p. 478)

Ontario's super allowance for scientific research and current cost adjustment is not considered to be government assistance, incentives or tax...

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12 October 1992 T.I. 922359 (September 1993 Access Letter, p. 406, ¶C9-283)

Where an amount is included in income under s. 9, s. 12(1)(x) will not apply and, therefore, the election under s. 13(7.4) will not be available.

31 August 1992 External T.I. 5-921279

Payments made by a non-resident corporation to a related corporation to indemnify it for potential penalties and interest relating to income and...

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30 November 1991 Round Table (4M0462), Q. 8.2 - Subscription to Preferred Shares by a Government Body (C.T.O. September 1994)

Where an investment by a government body in shares that pay no dividends does not represent an ordinary business investment, RC generally is of...

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30 November 1991 Round Table (4M0462), Q. 8.1 - Acquisition of a Business (C.T.O. September 1994)

"A payment as an inducement covered by subparagraph 12(1)(x)(i) to 12(1)(x)(iii) that is received as part of the acquisition of a business will be...

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91 C.R. - Q.19

It is a question of fact whether a contribution of capital by a shareholder to a corporation to fund the acquisition of a capital asset can...

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1 August 1991 T.I. (Tax Window, No. 7, p. 18, ¶1382)

The Nova Scotia research and development tax credit (which is a deduction in computing provincial income tax) is government assistance, whereas...

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26 July 1991 T.I. (Tax Window, No. 7, p. 2, ¶1376)

No general conclusion has been reached as to whether s. 12(1)(x) may apply to include a premium in the income of the issuer of commercial paper.

20 March 1991 T.I. (Tax Window, No. 1, p. 2, ¶1158)

FST inventory rebates received pursuant to s. 120 of the Excise Tax Act are considered to be assistance in respect of the cost of property or an...

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17 January 1991 Internal T.I. 7-90326

The interest component of damages received by a limited partnership in respect of interest assessments of its partners as a result of the failure...

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17 January 1991 Memorandum (Tax Window, No. 1, p. 4, ¶1150)

As a result of the amendments to s. 12(1)(x)(iv) effective 1 January 1990 all damages received after that date are included in s. 12(1)(x)(iv),...

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14 December 1990 T.I. (Tax Window, Prelim. No. 2, p. 23, ¶1056)

Most grants received under the Ontario Fast Start Program will be taxable under s. 12(1)(x).

30 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 17, ¶1067)

A government loan under which the corporation must commence repayment on the earlier of 2004 and the time at which cumulative sales levels have...

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4 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 6, ¶1023)

Where a tenant inducement payment is required to be included in income under s. 9 in accordance with GAAP, s. 12(1)(x) has no application, and no...

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19 September 1990 Memorandum ACC 96248

"Where any possibility of forgiveness is inherent in the terms and conditions of a loan agreement, paragraph 12(1)(x) applies to the principal...

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90 C.P.T.J. - Q.14

Even prior to the replacement in s. 12(1)(x)(iv) of "expense" by "outlay or expense", s. 12(1)(x)(iv) was not limited to reimbursements of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) 35

11 May 1990 Memorandum (October 1990 Access Letter, ¶1494)

The one-time transitional credit for small businesses provided under s. 346 of the Excise Tax Act will be taxable under s. 12(1)(x).

30 May 1990 T.I. (October 1990 Access Letter, ¶1459)

Where an amount of assistance falls within both ss.12(1)(x) and 37(1)(b), the latter will prevail.

5 February 1990 T.I. (July 1990 Access Letter, ¶1318)

Where a Canadian parent makes a contribution of capital to its wholly-owned subsidiary corporation to fund capital expenditures on SR&ED, the...

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5 January 1990 T.I. (June 1990 Access Letter, ¶1252)

Instead of requiring the inclusion in income of payments which grape farmers received from the Department of Agriculture to remove grapes from...

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3 January 1990 T.I. (June 1990 Access Letter, ¶1253)

Amounts of government assistance which decrease the cost of property pursuant to s. 53(2)(k) do not have to be included in the taxpayer's income...

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89 C.M.TC - "Leasing Costs" - "Application of Paragraph 12(1)(x) of the Act to the Tenant"

s. 12(1)(x) is not generally applicable to interest-free loans provided that the loan is unconditionally repayable. "It is possible that GAAR...

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88 C.R. - Q.16

Where a limited partner receives a cash flow grant from the developer if the cash flow received by him from the partnership is insufficient to...

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88 C.R. - Q.46

Where an interest-free loan is provided to an investor in a real estate project which is forgivable to the extent that a guaranteed cash flow...

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87 C.R. - Q.17

S.12(1)(x) will not have application solely by virtue of a loan provided as an inducement being made at lower than a commercial rate of interest,...

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86 C.R. - Q.8

Minor adjustments to an agreement in writing entered into before May 23, 1985 should not cause an inducement received after May 22, 1985 to be...

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86 C.R. - Q.9

A tax credit is "received" for purposes of s. 12(1)(x) when the tax instalments required to be made by the taxpayer are reduced, and otherwise at...

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86 C.R. - Q.10

The B.C. venture capital tax credit is not included in income.

Articles

Lewin, "Tax Treatment of Lease Inducement and At-Risk Rules and the New Limited Recourse Debt Rules", 1995 Corporate Management Tax Conference Report, c. 5.

Carr, "Lease Inducement Payments", 1993 Conference Report, C. 32.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Compensation Payments 0

Subparagraph 12(1)(x)(iii)

Administrative Policy

14 November 2007 Internal T.I. 2007-0254601I7 F - Paiement incitatif - Bon de souscription

As part of transactions for a sale of a business of Aco to a purchaser (Bco) for a cash sale price, and the entering into of an agreement for the...

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Words and Phrases
inducement
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 52 - Subsection 52(1) value of share purchase warrant included in recipient’s income under s. 12(1)(x) increased ACB of warrant 91

18 July 2006 Internal T.I. 2006-0184431I7 F - Prêt d'un gouvernement

In finding that a participating loan to the taxpayer (Xco) was not a forgivable loan, the Directorate stated:

[T]he [Loan] Agreement states that...

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Words and Phrases
forgivable loan

Subparagraph 12(1)(x)(iv)

Administrative Policy

7 October 2020 APFF Roundtable Q. 18, 2020-0862931C6 F - 12(1)(x) and CEBA

In commenting on the consequences of a corporation receiving a $40,000 loan under the Canada Emergency Business Account (“CEBA”) program, CRA...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(hh) the parties can agree to allocate late CEBA loan repayments between the forgivable and non-forgivable loan components 374
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) s. 12(2.2) can be applied to non-deductible expenses/consequences of CEBA loan not being forgiven 271

10 November 2020 External T.I. 2020-0861461E5 - TI – Tax Treatment of Loan Forgiveness under CEBA

The Canada Emergency Business Account (“CEBA”) provides interest-free loans of up to $40,000 to small businesses and not-for-profit...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) s.12(2.2) election can be made re s. 12(1)(x)(iv) inclusion for forgivable CEBA loan 146

20 May 2014 External T.I. 2013-0516121E5 F - Debt forgiveness

A compromise by Aco under Division I of Part III of the Bankruptcy and Insolvency Act resulted in reassessments owing by Aco for unremitted GST...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) s. 12(1)(x)(iv) inclusion from BIA settlement of GST interest and penalties could be offset against related expense 157
Tax Topics - Income Tax Act - Section 248 - Subsection 248(26) unremitted GST and QST were not obligation "issued" by debtor 102
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Commercial Debt Obligation BIA settlement of unremitted GST interest 127
Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt BIA settlement of unremitted GST on sales was on capital account 82

20 November 2012 External T.I. 2012-0440031E5 F - Quebec Tax Credit for Production of Performances

Must the Québec Credit for the Production of Performances ("QCPP"), which is provided by Revenu Québec respecting qualifying expenditures of a...

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8 December 2010 External T.I. 2010-0375921E5 - Subsection 20(24)

Where no s. 20(24) election was made in the situation where the vendor of a business has paid a purchaser to assume its deferred revenue...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) income to both vendor and purchaser if no election/payment by set-off/no prescribed form 131

19 May 2010 External T.I. 2010-0364761E5 F - Beneficiary not taxed on Part XII.4 tax credit

Corporation A, which has a sanitary landfill site and must annually fund an qualifying environmental trust to provide a fund for the post-closure...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 127.41 - Subsection 127.41(1) Pt XII.4 tax credit is received by the taxpayer respecting Pt XII.4 tax paid by the QET 119

8 October 2004 APFF Roundtable Q. 34, 2004-0087021C6 F - Remboursement de frais de financement

Would s. 12(1)(x) apply in a situation where a corporation (the "Borrower") incurred financing expenses in connection with money that was...

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IT-273R2, "Government Assistance - General Comments," para. 12

Timing of recceipt of benefit of tax credit

¶ 17. Federal and provincial tax credits and deductions from tax which are in the nature of...

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Articles

Gregory M. Johnson, Wesley R. Novotny, "An Update on Flow-through Shares in the Energy Sector", 2016 Conference Report (Canadian Tax Foundation),12:1-39

Inclusion of flow-through share indemnity payment under s. 12(1)(x)(iv) and deduction under s. 12(2) as “outlay" (p.12:28-29)

...The CRA's view...

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Subparagraph 12(1)(x)(v)

Administrative Policy

19 January 2005 External T.I. 2004-0091601E5 F - Incitatif versé - taux d'intérêt réduit

In order to finance $400,000 of the $500,000 purchase price of a rental property, the taxpayer receives a 5-year mortgage loan from a financial...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 53 - Subsection 53(2.1) ss. 13(7.4) and 53(2.1) elections unavailable re acquired rental property for cashback received from mortgage lender to offset high interest rate 198
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) s. 12(2.2) election available to reduce mortgage interest, re cashback received from mortgage lender, to reduce extra interest incurred in two initial years 171

Subparagraph 12(1)(x)(vi)

Administrative Policy

28 June 2010 External T.I. 2009-0350241E5 F - Crédit d'impôt pour investissement du Québec

Is the Quebec investment tax credit an inducement payment required to be included in income under s. 12(1)(x), or is it applied to the cost of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) - Paragraph 13(7.1)(f) Quebec investment tax credit reduces capital cost at end of year for which it is claimed, excepting any carryforward portion 213
Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance Quebec investment tax credit is government assistance 46

Subpargraph 12(1)(x)(viii)

See Also

Ritchie v. The Queen, 2018 TCC 113

The taxpayer, who rented his farm to a corporation controlled by him, received an early “signing bonus” of $255,790 from Enbridge for entering...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) signing bonus assimilated to proceeds under the signed contract 113

Administrative Policy

16 May 2005 Internal T.I. 2005-0119061I7 F - Montant d'aide-actions

Prod Co, a wholly owned subsidiary of M Co and a "qualified corporation," produces a Canadian film or video production ("CFVP") at a cost of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.4 - Subsection 125.4(1) - Assistance - Paragraph (a) conversion of loan that was taxable assistance into shares is not itself assistance] 192
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Excluded Obligation - Paragraph (a) conversion of loan that was taxable assistance under s. 12(1)(x) into shares with lower FMV would not give rise to forgiven amount 304
Tax Topics - Income Tax Regulations - Regulation 1106 - Subsection 1106(1) - Excluded Production - Paragraph (a) - Subparagraph (a)(iii) transfer of all the revenues to a film implies a transfer of its copyright 191
Tax Topics - General Concepts - Ownership transfer of the economic benefit of copyright entails transfer of its ownership 149
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) subscription for shares of sub at overvalue constitutes a contribution of capital, generating a s. 53(1)(c) basis bump 80

Paragraph 12(1)(x.2)

Administrative Policy

21 March 2006 External T.I. 2005-0158451E5 F - Québec Mining Duties Act - Credit for Losses

S. 32 of the Quebec Mining Duties Act (MDA) provided a credit to an operator equal generally to an amount not exceeding 12% of the lesser of (i)...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Cumulative Canadian exploration expense - Element J credit under the Quebec Mining Duties Act based on exploration and development losses of operator was not “assistance" under J 207
Tax Topics - Income Tax Act - Section 66 - Subsection 66(12.6) - Paragraph 66(12.6)(a) credit under the Quebec Mining Duties Act based on exploration and development losses of operator was too remote from the exploration to reduce the renounced CEE 211

Paragraph 12(1)(z.7)