Section 110.6

Table of Contents

Subsection 110.6(1) - Definitions

Annual Gains Limit

Administrative Policy

6 December 2017 External T.I. 2016-0667361E5 F - Taxable Capital Gains Designation

After noting that s. 104(21), which indicates that, in specified circumstances, taxable income distributed by a trust can be designated as being a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(21.2) eligibility of a gain for the capital gains deduction is lost when it is distributed by a lower-tier to upper-tier trust 289

86 C.R. - Q.49

The exemption will be available in respect of capital gains allocated by a partnership.

Cumulative Net Investment Loss

Administrative Policy

1990 Answers of Calgary District Office (May 1990 Access Letter, ¶1200, Q. 11)

Where an employee has received an interest-free loan to acquire shares of his employer, his cumulative net investment loss will be increased by...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Eligible Real Property Gain

Administrative Policy

21 June 1993 T.I. (Tax Window, No. 32, p. 8, ¶2600)

Re whether property last acquired by an individual after February 1992 from the individual's spouse will give rise to an eligible real property gain.

Interest in a Family Farm or Fishing Partnership

Administrative Policy

13 July 2016 External T.I. 2013-0478961E5 F - Interest in a family farm or fishing partnership

A farming couple (Mr and Mrs X) held all the interests in a partnership (SENC) holding the farm property, which leased that land to a farming...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

29 March 2012 External T.I. 2011-0427821E5 F - Biens agricoles admissibles

Farm A Inc. and a partnership (Farm B SENC) were both owned 50/50 by two spouses (Mr. A and Ms. B). Farm B SENC leased the farm land and buildings...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 30 s. 30 expenses can be claimed by farming lessee or carried forward 187

Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

6 October 2017 APFF Roundtable Q. 16, 2017-0709161C6 F - Résidence principale sur une terre agricole

Mr. and Mrs. X each have had, for over 10 years, a 50% interest in a partnership (SENC) holding land which as to 80% has been used in the farming...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property non-severable farm is a single indivisible property 113

18 June 2015 External T.I. 2015-0572791E5 F - Société de personnes agricole familiale - BAA

A partnership ("SENC"), which has been operating a commercial woodlot as its sole asset (a capital property) under a forest management plan...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Interest in a Family Farm Partnership

Administrative Policy

21 January 1991 T.I. (Tax Window, Prelim. No. 3, p. 23, ¶1098)

A residence located on a farm which is occupied by members of the family partnership who operate the farm is property used in a farming business...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Investment Expense

Administrative Policy

3 July 1991 T.I. (Tax Window, No. 5, p. 21, ¶1336)

The taxable benefit from an interest-free loan which is deemed to be interest under s. 80.5 and to be deductible under s. 20(1)(c) is properly...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

13 March 1991 T.I. (Tax Window, No. 1, p. 17, ¶1142)

Where a partner uses borrowed money to acquire an interest in a partnership that has income from an active business and from property, the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

28 May 1990 T.I. (October 1990 Access Letter, ¶1446)

A loss from a rental operation carried on without a reasonable expectation of profit is not an investment expense.

89 C.P.T.J. - Q8

A taxpayer with working interest CEE and also flow-through share CEE should set up notional CCEE pools to assist in the CNIL calculation. The...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Investment Income

Administrative Policy

13 January 1993 T.I. 923208 (November 1993 Access Letter, p. 505; Tax Window, No. 28, p. 15, ¶2382)

A guarantee fee ordinarily will be considered to be business income rather than investment income.

Non-Qualifying Real Property

Administrative Policy

22 July 1994 External T.I. 9401365 - NON-QUALIFYING REAL PROPERTY

None of the exclusions in s.(a)(iii)(C) to (G) is available where the real property is used in a business carried on by another partnership.

Where...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

12 January 1993 T.I. 923151 (November 1993 Access Letter, p. 503, ¶C109-154)

The use of the word "principally" requires that the property as a whole be considered rather than a percentage or a portion of the property....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Words and Phrases
principally

8 January 1993 T.I. 922776 (November 1993 Access Letter, p. 503, ¶C109-155; Tax Window, No. 28, p. 5, ¶2367)

Real property owned equally by two unrelated individuals that is leased by them to a corporation owned equally by them to be used by it in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Articles

Hirsch, "Capital Gains Exemption in Real Property", 1992 Conference Report, c.11.

Qualified Farm or Fishing Property

See Also

Otteson v. The Queen, 2014 DTC 1173 [at 3637], 2014 TCC 250

The taxpayers, spouses, bought a farm in 2003 to start a tree farming business. Following the discovery of gravel deposits, and before the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 no presumption that spouses are not business partners 182

Administrative Policy

11 June 2015 External T.I. 2014-0522641E5 F - Usufruct

A father, who has carried on a farming business for a number of years, grants the bare ownership of the property for consideration to his son...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(7) creation of usufruct between father and son, resulting in deemed trust, did not entail property transfer to the deemed trust 306
Tax Topics - Income Tax Act - Section 73 - Subsection 73(3) creation of usufruct between father and son entails transfer of trust interest, not farm property 180

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

A family farming partnership ("SENC"), which owns a "qualified farm or fishing property," sells the right to operate the sand pit to a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

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 - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) sale of rights to extract sand generally not caught unless a profit à prendre 128

28 January 2014 External T.I. 2014-0517601E5 - Qualified farm Property

Father acquired land which he actively farmed for a number of years, and then rented the land to his son. On father's death the taxpayer and the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 February 2012 External T.I. 2011-0413311E5 F - Bien agricole admissible

Father acquired a woodlot and a building in 1977 and thereafter leased it to his son who used it as part of his farming business. In 1994, Father...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

18 February 2008 External T.I. 2006-0205321E5 F - BAA-corpropriété indivise, QFP-undivided interest

Two brothers (B1 and B2) hold several pieces of farmland in equal co-ownership. In finding (contrary to an earlier position) that their...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 44 - Subsection 44(5) on partition and exchange of farms held by two brothers in equal co-ownership, the acquired 50% interests could qualify as replacement properties 232

7 June 2006 External T.I. 2005-0161881E5 F - Biens agricoles admissibles

The taxpayer, who had farmed farmland as his only source of income, transferred the farmland to a partnership with his spouse, with their...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

21 November 2005 External T.I. 2005-0121232E5 F - Bien agricole admissible

The farm property disposed of by the individuals did not qualify as a qualified farm property given inter alia that an aunt (who held the property...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

16 March 1998 External T.I. 9638135 - Definition of "used principally"

With respect to a 300-acre property, 50 acres of which were used for agricultural purposes and the balance, because of the steep terrain, lack of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

27 December 1995 External T.I. 9532775 - GRAZING LEASES - QUALIFIED FARM PROPERTY

Grazing leases (which qualify as real property, i.e., leasehold interests) may qualify as qualified farm property.

12 May 1994 Institute of Chartered Accountants of Alberta Roundtable Q. 20, 9409737 - QUALIFIED FARM PROPERTY

Taxable capital gains (including taxable capital gains arising from the transfer of qualified farm property to a corporation in order to utilize...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

5 April 1994 External T.I. 9336485 - CAP. GAINS EX. FARM PROP.

In response to an inquiry as to whether a personally owned property of a deceased spouse which was used in a farming operation but is not used by...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

12 May 1994 External T.I. 9406925 - INCOME FROM ALL SOURCES

For purposes of the gross revenue test in paragraph (vi)(A) of the definition of "qualified farm property", gross revenue from farming would not...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

23 June 1993 T.I. (Tax Window, No. 32, p. 14, ¶2609)

Real property rented by an individual to a corporation would be considered to be used by the corporation for the purposes of the definition of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

11 February 1993 T.I. (Tax Window, No. 29, p. 18, ¶2423)

The two-year gross revenue test in the definition may be applied to any one of the persons described in ss. (a)(i) to (iii) without that person...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

7 December 1992 T.I. (Tax Window, No. 27, p. 18, ¶2325)

Property that is held by a spousal trust and used by a nephew of the deceased in the business of farming will not qualify because a spousal trust...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

92 C.R. - Q.52

The fact that a farm property has been subject to the "restrictive farm loss" provisions of section 31 does not preclude it from qualifying as a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

30 July 1992 T.I. 921204 (January - February 1993 Access Letter, p. 26, ¶C109-125)

Comprehensive discussion of the meaning of the phrase "qualified farm property".

9 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 17, ¶1035)

GAAR will not apply to a transfer of farmland by an individual to his child pursuant to s. 73(3) following shortly thereafter by a sale by the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) 38

7 October 1991 T.I. (Tax Window, No. 10, p. 13, ¶1508)

A farming business and a relatively large-scale brokerage business for vegetables not grown by the corporation are separate businesses.

Discussion...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

19 June 1990 T.I. (November 1990 Access Letter, ¶1526)

Where a full-time farmer commenced another occupation but retained the farmland and continued to live in the farmhouse, the land would still meet...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

28 May 1990 T.I. (October 1990 Access Letter, ¶1472)

General discussion.

8 September 89 T.I. (February 1990 Access Letter, ¶1116)

Farm land used in an operation subject to the loss limitation in s. 31 will be regarded as used in a farming business.

Paragraph (a)

Administrative Policy

7 March 2012 External T.I. 2011-0421301E5 F - Bien agricole admissible

Forestry activities that occurred on the farm land in question included harvesting and selling firewood, forest management, tree planting and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(a) general discussion of s. 110.6(1.3)(a) tests 228

Subparagraph (a)(iii)

Administrative Policy

1 March 2004 External T.I. 2003-0017861E5 F - Bien agricole admissible

Mr. B, who inherited farmland from his father, used the land for farming for a number of years before selling part of it. There was a deemed...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 159 - Subsection 159(5) general overview/ election unavailable where s. 70(9) applies 172

Qualified Small Business Corporation Share

Cases

Hudon v. Canada, 2001 DTC 5630, 2001 FCA 320

In the years in question a corporation ("Hall River") which owned forest concessions and rights to develop the hydro electric potential of a river...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

See Also

Durocher v. The Queen, 2016 DTC 1013 [at 2584], 2015 TCC 297, aff'd 2016 CFA 299

A financial institution, which was controlled by a non-resident, acquired an option to subscribe at a future date for the majority of the equity...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Canadian-Controlled Private Corporation potential illegality of an option to acquire control of a private corporation did not nullify the option, so that the corporation was not a CCPC 447
Tax Topics - General Concepts - Illegality potential illegality of an option to acquire control of a private corporation did not nullify the option, so that the corporation was not a CCPC 171

Pellerin v. The Queen, 2015 TCC 130 (Informal Procedure)

The taxpayer (Mika), who was born on March 8, 2007, received a distribution of shares qua beneficiary of a Quebec family trust (and personal...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(b) fetus retroactively deemed to be beneficiary on birth 75

Twomey v. The Queen, 2012 DTC 1255 [at 3739], 2012 TCC 310

In 2005, the taxpayer sold 78 of his 100 common shares of an Ontario corporation ("115") to the other shareholder ("D.K."), and claimed the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Effective Date subsequent share issuance to give effect to shareholders' intent "gave effect to the true facts" 282

Administrative Policy

20 February 2018 External T.I. 2017-0727811E5 F - Synthetic disposition

10 months after the formation by him of a small business corporation, A agrees with an arm’s length employee of the corporation to sell 1/3 of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Synthetic disposition arrangement an arrangement which eliminates all risk of loss nonetheless “appears” not to be a synthetic disposition arrangement if there is 20% profits participation 264

7 October 2016 APFF Roundtable Q. 9, 2016-0652921C6 F - Résidence - actif utilisé / Residence - asset used

Mr. A holds all the shares of Corporation A, which carries on a farming business operated by Mr. A (but not as employee). Corporation A holds the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

7 October 2016 APFF Roundtable Q. 11, 2016-0652941C6 F - Contrat de location / Capital lease

Although CRA considers it to be irrelevant whether, under GAAP, a lease is capitalized by a lessee as a capital lease, it considered that the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation FMV of rights under a lease must be included 144

17 July 2013 External T.I. 2012-0473261E5 F - Actif d'impôts futurs / Future income tax assets

Is a future income tax asset an asset that is used principally in an active business carried on in Canada for purposes of the "qualified small...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation tax receivable arising from carryback of NCL is active business asset cf. future tax asset 190

11 October 2013 APFF Roundtable, 2013-0495631C6 F - Actions admissibles de petites entreprises

Mr. X holds all the common shares of Holdco, whose only asset is shares of Opco with a fmv of $1M. Opco's has $1.5M of cash, $3.5M of active...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation 90% is generally a safe harbour, and in a particular context CRA may accept lower than 90% 138

7 October 2013 External T.I. 2013-0500941E5 F - Actif utilisé dans une entreprise active

A corporation carrying on an active business has a 9.9% interest in a general partnership (an SENC), whose sole property is a rental builiding...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

10 May 2013 External T.I. 2012-0449651E5 F - SENC - revenu d'entreprise exploitée activement

Holdco holds (as its only assets) a 99% limited partner interest in a limited partnership (LP), and the general partner (Quebec Inc.) holds a 1%...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 129 - Subsection 129(6) Norco followed 39

9 June 2005 External T.I. 2004-0092001E5 F - Droits indivis dans les actions

As the result of the winding up of a partnership that held shares of a small business corporation, one of the former partners has held undivided...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Words and Phrases
share
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Share undivided interests in QSBC shares qualify as shares 97

10 October 2003 External T.I. 2003-0030045 F - AAPE-LIQUIDITE DETENUE MOMENTANCEMENT

In order that the vendors of a corporation may receive repayment of amounts owing to them, one day before the sale of their shares the purchaser...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

7 March 2002 External T.I. 2001-0091785 - ACTIVE BUSINESS ASSETS - CASH

in finding that cash accumulated to pay annual bonuses to the shareholder-managers was used in the corporation's active business and generated...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Income of the Corporation for the Year From an Active Business cash accumulated to pay bonuses was active asset 384

4 July 1997 Technical Interpretation 5-9636

A residual interest (as defined in s. 98.1) is an asset used principally in an active business carried on primarily in Canada by the partner if...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

9 September 1996 External T.I. 9619985 - LAND INVENTORY - ACTIVE BUSINESS ASSET

Where the only significant asset of a corporation was a large development property in the planning stages of development, RC questions whether the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

13 October 1994 External T.I. 9416755 - ACTIVE BUSINESS ASSETS - INSURANCE PROCEEDS

"Where ... a corporation has significant short term cash reserves as a result of receiving insurance proceeds and the corporation immediately uses...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

21 October 1994 External T.I. 9422195 - CAPITAL GAINS EXEMPTION

"A seasonal temporary closure of operations of a business done on a recurring basis, does imply that an active business has, notwithstanding such...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

12 April 1994 T.I. (C.T.O. "Active Assets")

Whether an investment in shares qualifies as an asset used principally in an active business turns on whether such asset is used principally in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

12 April 1994 External T.I. 9402365 - ACTIVE ASSETS- CASH

List of seven factual guidelines that may be applied to determine whether cash held by a corporation is used in its active business.

28 June 1994 External T.I. 9330615 - DEFINITION OF QSBCS

Where the fair market value of the assets of a corporation ("Parentco 1") comprise active business assets (40%), shares of one subsidiary (12%),...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

5 May 1994 External T.I. 9330275 - USE OF A BUILDING IN AN ACTIVE BUSINESS

Where two unrelated corporations each have a 1/2 undivided interest in a building and each use 1/2 of the building as their business premises,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

14 February 1994 External T.I. 9330405 F - Capital Gains Exemption

The position in IT-268R3, that a residence owned by a corporation will be regarded as used in the business of farming if more than 50% of its use...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

9 August 1994 External T.I. 9333125 - CAPITAL GAINS EXEMPTION

The respective corporations of a husband and wife together hold 100% and 40%, respectively, of Opco 1 and Opco 2 "through" a general partnership...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1994 A.P.F.F. Round Table, Q. 35

Favourable analysis of a purification transaction in which a subsidiary whose shares represent 30% of the fair market value of the assets of a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

93 C.R. - Q. 58

RC considers that a corporate limited partner uses its proportionate share of each asset of the limited partnership for purposes of the definition...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

9 February 1993 T.I. (Tax Window, No. 29, p. 3 ¶2436)

Unless a corporation's business includes the lending of money, a loan receivable from the son of a controlling shareholder will not qualify as an...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

13 January 1993 T.I. 923260 (November 1993 Access Letter, p. 504, ¶C109-156)

Where a corporation owned by an individual ("Holdco") sold its shares of Opco to Newco, a newly-incorporated corporation owned by the same...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

2 December 1992 T.I. (Tax Window, No. 27, p. 22. ¶2320)

Refundable deposits paid under the Pits and Quarries Control Act are assets used in the active business of a pit operator.

7 December 1992 T.I. (Tax Window, No. 27, p. 18, ¶2326)

Where a private corporation goes public and a shareholder receives shares of the public corporation under the rollover in s. 86, the status of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

92 C.R. - Q.54

Prepaid expenses relating to an active business of the corporation could be considered as an asset used principally in an active business provided...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

92 C.R. - Q.24

Transactions whereby a stock dividend is issued to the sole shareholder of a corporation who transfers the stock dividend shares to Newco,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) 50

28 July 1992 T.I. (Tax Window, No. 21, p. 7, ¶2054)

Where an individual controls a corporation (Holdco) which in turn controls another corporation (Opco), indebtedness of Holdco owing to Opco will...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

29 July 1992 External T.I. 5-921123

Discussion of the application of the requirement for ownership for 24 months by none other than the individual or a person or partnership related...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

25 August 1992 External T.I. 5-920191

Re whether cash and term deposits qualify as assets used primarily in an active business.

23 June 1992 T.I. (April 1993 Access Letter, p. 146, ¶C109-128)

Paragraph (d) of the definition can have no application where there are only two corporations and one of the corporations (Holdco) has, as its...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1992 A.P.F.F. Annual Conference, Q. 9 (January - February 1993 Access Letter, p. 53)

Where Opco pays a dividend in kind with the appropriate amount to two Holdcos, each owing 50% of its shares, who then, by mutual agreement,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

10 January 1992 Memorandum (Tax Window, No. 17, p. 13, ¶1773)

A building only 40% of which is used in an active business is not an asset used principally in an active business.

25 March 1992 T.I. (Tax Window, No. 18, p. 14, ¶1828)

Amounts put in trust by clients of a funeral home corporation are not assets of the corporation for purposes of determining whether it is a small...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

19 March 1992 T.I. (Tax Window, No. 18, p. 5, ¶1823)

Where an individual acquires shares from her husband before their divorce (at which time their shares have been held by him for more than 24...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

11 February 1992 T.I. (Tax Window, No. 16, p. 18, ¶1743)

The rental of a fishing licence would not necessarily preclude that asset from being considered to be used in an active business.

91 C.R. - Q.13

Re meaning of "primarily".

91 C.R. - Q.14

Where the sole asset of a Canadian-controlled private corporation is a 50% interest in a partnership 60% of whose assets are used in an active...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 January 1992 T.I. (Tax Window, No. 12, p. 11, ¶1575)

Four numerical examples illustrating the application of the "all or substantially all" test in paragraph (d).

7 and 29 October 1991 T.I. (Tax Window, No. 10, p. 1, ¶1504)

In order for a loan owing to a corporation to be a qualifying asset for purposes of s.(c)(ii) it must be issued by a subsidiary rather than a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

16 September 1991 TI (Tax Window, No. 9, p. 9, ¶1451)

The extended meaning of "control" in s. 186(2) may also apply in determining whether corporations are connected for purposes of the definition of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

4 June 1991 Memorandum (Tax Window, No. 4, p. 22, ¶1276)

A shelf company will be treated as newly-incorporated at the time it is transferred by the lawyer to the taxpayer, provided that prior to the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

15 May 1991 T.I. (Tax Window, No. 6, p. 2, ¶1357)

Where the shares of Parentco are owned by related persons, its subsidiary will be deemed for purposes of Part IV and the definition of a qualified...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 186 - Subsection 186(2) 35

24 April 1991 T.I. (Tax Window, No. 2, p. 12, ¶1211)

A corporation which meets the other tests will be a qualified small business corporation if 51% of its directly held assets are active business...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

12 April 1991 T.I. (Tax Window, No. 2, p. 5, ¶1187)

Mortgages held by a developer which were the consideration for sales of its land inventory would not qualify as being used in an active business...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 January 1991 T.I. (Tax Window, Prelim. No. 3, p. 7, ¶1106)

Discussion of the loss of the exemption as a result of the transfer of shares to a holding company controlled by unrelated individuals.

23 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 21, ¶1026)

The business of a corporation may be considered to have commenced when essential preliminaries to the carrying on of that business in an active...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 15, ¶1034)

Where the sole asset of a corporation was land leased by it to its sole individual shareholder for use in his active business, such use will not...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

90 C.R. - Q18

Where land is acquired and a building is constructed for use in an active business which will be expanding or relocating to the new facility, and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

19 March 1990 T.I. (August 1990 Access Letter, ¶1378)

Where a franchisee corporation has a substantial investment in special shares and notes of the franchisor, such shares and notes would be...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

8 March 1990 T.I. (August 1990 Access Letter, ¶1379)

Property is used in an active business if it is used principally with respect to that business and put to risk in the venture. However, engaging...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

8 March 1990 T.I. (August 1990 Access Letter, ¶1379)

A corporation doing business in the real estate development field and which holds some parcels of inventory which have not yet been developed will...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

2 March 1990 T.I. (August 1990 Access Letter, ¶1376)

If within 24 months of the determination time, the corporation in question had transferred 60% of its active business assets to a wholly-owned...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

27 February 1990 T.I. (July 1990 Access Letter, ¶1326)

A stock split which does not increase the appropriate stated capital account is not considered to result in new shares being issued for purposes...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

26 February 1990 T.I. (July 1990 Access Letter, ¶1327)

Shares of a public corporation which supplies products to the CCPC in question ("Opco") will qualify as assets used in the active business of Opco...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

20 February 1990 T.I. (July 1990 Access Letter, ¶1325)

Where Holdco has an intercompany receivable owing to it from its wholly-owned subsidiary, Opco, and such intercompany receivable represents more...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

19 February 1990 T.I. (July 1990 Access Letter, ¶1325)

Where XYZ holds all the shares of A, more than 50% of the assets of A consists of advances to XYZ, the balance of such assets being used in an...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

18 January 1990 T.I. (June 1990 Access Letter, ¶1273)

A corporation which holds real estate inventory which had been acquired to be resold, although no sale had occurred over the past five years, is...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

13 December 1989 T.I. (May 1990 Access Letter, ¶1227)

The expanded concept of control set out in s. 186(2) applies for purposes of the connected corporation test contained in the definition of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

15 November 89 T.I. (April 90 Access Letter, ¶1179)

The 24-month test will not be met where the taxpayer acquired the shares from her husband less than 24 months before the determination time, and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

19 September 89 T.I. (February 1990 Access Letter, ¶1119)

Where Holdco holds a loan receivable from a related corporation which is not connected ("Opco"), the loan receivable will not be an asset used in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

89 C.R. - Q.11

RC is presently reviewing whether its position in IT-486R, that an asset is used in a business if more than 50% of its use is in respect of that...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

October 1989 Revenue Canada Round Table - Q.12 (Jan. 90 Access Letter, ¶1075)

Proceeds of an insurance policy can taint a corporation even where the proceeds were distributed shortly after their reception by the corporation....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

88 C.R. - "Small Business Corporation Shares" - "Background"

The exception in paragraph (d) is designed to preclude circumvention of the 50 percent test by stacking of holding companies."

88 C.R. - F.Q.33

The receipt of life insurance proceeds by a corporation upon the death of a shareholder can breach the 50% test even if the proceeds are paid out...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

88 C.R. - "Small Business Corporation Shares" - "Background"

The exception in paragraph (d) is designed to preclude circumvention of the 50 percent test by stacking of holding companies."

88 C.R. - F.Q. 35

The fair market value of an asset is determined without regard to a mortgage debt on the asset.

Articles

Mallin, "Organizing and Reorganizing to Ensure 'Qualified Small Business Corporation Share' Status", 1990 Canadian Tax Journal, pp. 745, 1026.

Truster, "The Capital Gains Exemption", 1989 Conference Report, c. 12.

Paragraph (b)

Administrative Policy

7 October 2011 Roundtable, 2011-0411831C6 F - Définition du mot mois

On February 5, 2009, Mr. X acquired all the shares of Opco A (at all relevant times, a small business corporation) from an unrelated individual,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation Act - Section 35 24-month period preceding time on Date X interpreted as extending back 24 months from the day before Date X 111

Paragraph (c)

Subparagraph (c)(i)

Administrative Policy

11 October 2013 Roundtable, 2013-0499671C6 F - Actif d'impôts futurs / Future income tax assets

Is a future income tax asset an asset used in an active business for the purposes of the definition of QSBC definition? CRA responded (reversing...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation future income tax asset is not an asset – tax receivable is, but is an active business asset if it arose from active business 177

12 February 2008 External T.I. 2006-0217301E5 F - Actions admissibles de petite entreprise

In indicating that property held by a trust of which a corporation is the sole beneficiary is not considered assets of the corporation for the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

20 July 2004 External T.I. 2004-0062031E5 F - Actif utilisé dans entreprise exploitée activement

A corporation owned a large area of vacant land in Canada (for instance, in an industrial park) and, as the corporation wished to locate in the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business an adventure is not “carried on” if there is insufficient activity 225
Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Active Business Carried On by a Corporation an adventure is a business for s. 125(1) (but not 110.6) purposes even if it is not carried on 148

Paragraph (e)

Administrative Policy

23 February 2012 External T.I. 2011-0421821E5 F - Test à l'alinéa 110.6(1)e) de la définition d'AAPE

Mr. X acquired the shares of Holdco (holding only the shares of Opco) on January 1, 2010 and, on September 1, 2011, he transferred his Holdco...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

18 October 2004 External T.I. 2004-0077151E5 F - Déduction pour gain en capital

In connection with indicating that, where an individual shortly after commencing a proprietorship, transfers all of the assets used such active...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f) - Subparagraph 110.6(14)(f)(ii) no requirement for the combined period of holding to be 24 months 204

Subparagraph (e)(ii)

Administrative Policy

8 November 2005 External T.I. 2005-0117791E5 F - Exonération des gains en capital

Mr. X, who held the common shares of Holdco which, in turn, held all the shares of Opco which, during the last 24 months satisfied the description...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Share of the Capital Stock of a Family Farm or Fishing Corporation

Administrative Policy

7 October 2016 APFF Roundtable Q. 9, 2016-0652921C6 F - Résidence - actif utilisé / Residence - asset used

CRA will accept that a farm house is an active business asset for purposes of the definitions of “qualified small business corporation share,”...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share farm house must be more than 50% used by farm employees to qualify 222

30 June 2016 External T.I. 2015-0583561E5 F - Déduction pour gain en capital - contamination

Under the AgriInvest program (and a similar Quebec program), if a farmer contributes up to 1% of his allowable net sales (or $15,000, if less) to...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.1) AgriInvest accounts do not affect qualification of family farm or fishing corporations 107
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Net Income Stabilization Account Agri-Québec and AgriInvest accounts included 96

24 December 2012 External T.I. 2012-0457881E5 - Share of a capital stock of a family farm

After stating that the comments in 2000-0011595 were still valid, CRA quoted with approval the statemnt therein that:

property that is owned by...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

18 June 2004 External T.I. 2004-0058621E5 F - Société agricole familiale

A couple (Mr. A and Ms. B) sold their undivided co-ownership interests in their farming business (in which Mr. A had been actively engaged on a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

22 August 1995 External T.I. 9518465 - SHARE OF FAMILY FARM CORPORATION

"As regards the 24-month period [in para. (a)], it does not have to be the 24-month period immediately prior to the determination time. However,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

92 C.R. - Q.53

If throughout an 8-year period that a corporation owns a particular piece of land, the corporation is carrying on a farming business in which one...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1 October 1991 T.I. (Tax Window, No. 10, p. 13, ¶1491)

To be actively engaged the individuals' contributions of time and attention to the business would be determinant in its successful operation.

19 February 1990 T.I. (July 1990 Access Letter, ¶1328)

Where a farm house owned by the corporation accommodates only individuals who are actively engaged in the farming business and their family...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Articles

Henry Shew, Jody Wong, "Multi-Level Farming Structures and the Capital Gains Exemption", Canadian Tax Focus, Vol. 6, No. 3, August 2016, p. 10

Loss of deduction for qualified farm or fishing property (“QFFP”) where shareholding in unrelated Farmco is held through Holdco (p. 11)

[T]he...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

4 November 2011 Internal T.I. 2011-0413341I7 F - Bien agricole admissible

The taxpayer acquired farmland and rented 50% of it to an unrelated farm producer and 50% to a corporation that operated a nursery there and whose...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming nursery qualifies as farming if focused on growing rather than selling 107
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(c) s. 110.6(19) election effected a post-1987 acquisition 159
Tax Topics - Income Tax Act - Section 70 - Subsection 70(10) - Child extended meaning of "child" 158
Tax Topics - Income Tax Act - Section 73 - Subsection 73(3) - Paragraph 73(3)(c) rollover unavailable where taxpayer rented out the land to a farmer 153

Subparagraph (a)(iii)

Administrative Policy

17 July 2012 Internal T.I. 2012-0454701I7 F - Arrière-arrière-grand-père

Mr. A, who was the great-great-grandfather of the taxpayer, owned and used property in a farming business carried on in Canada. The farm property...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 252 - Subsection 252(2) - Paragraph 252(2)(a) parent in s. 110.6 context includes great-grandparent but not great-great-grandparent 185

Paragraph (b)

Administrative Policy

22 November 2010 External T.I. 2010-0374861E5 F - Actions - société agricole familiale

An individual (Mr. Y) acquired the shares of Farmco (a CCPC whose only property, being farmland and farm equipment, had been used principally in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(1.1)

Administrative Policy

30 June 2016 External T.I. 2015-0583561E5 F - Déduction pour gain en capital - contamination

Do accounts established under the AgriInvest and Agri-Québec programs affect the calculation of percentages for purposes of the capital gains...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(1.3) - Property used in a farming business

Administrative Policy

9 June 2015 External T.I. 2014-0554381E5 F - Copropriété par indivision - partage de biens

Mr A held land used by him in farming in co-ownership with his brother. Following a partition and cessation of farming, Mr A became the sole owner...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(20) retention of original acquisition date under s. 248(20)(b) 147

11 May 2011 External T.I. 2011-0394231E5 F - Subsections 14(1.01) and 85(1) - Quotas

A dairy farming partnership transfers its business to a newly-incorporated corporation. Some of its milk quotas (which can be identified by the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(a) otherwise-fungible milk quotas could be segregated on the basis of their tax characteristics 156

Paragraph 110.6(1.3)(a)

Administrative Policy

18 June 2015 External T.I. 2015-0572791E5 F - Société de personnes agricole familiale - BAA

A partnership ("SENC"), which has been operating a commercial woodlot as its sole asset (a capital property) under a forest management plan...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

7 March 2012 External T.I. 2011-0421301E5 F - Bien agricole admissible

In the context of a forest management operation that had been managed by the taxpayer and two other family members, CRA stated:

In general, it is...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property - Paragraph (a) logging is not farming business if main focus is logging rather than growing, nurturing and harvesting trees 149

2 December 2010 External T.I. 2010-0376451E5 F - Paragraphe 69(11) et transfert de biens agricoles

Upon the death of their father (Mr. X), Sons A and B received a devise of the farm that he had actively farmed until his death, but which was not...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 70 - Subsection 70(9) s. 70(9.01) could apply to devise of farming property, that was farmed by father but not sons, to them 110
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) s. 69(11) could apply where devisee sells qualified farm property shortly after receiving it under s. 70(9.01) 178

Subparagraph 110.6(1.3)(a)(i)

Administrative Policy

7 October 2016 APFF Roundtable Q. 10, 2016-0652931C6 F - Bien agricole admissible-saisine par succession

Does CRA consider that the test in s. 110.6(1.3) for holding by ascendants or descendants is satisfied when a child acquires the property from the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership estate owns its property 111

Paragraph 110.6(1.3)(b)

Administrative Policy

2 October 2015 External T.I. 2012-0463801E5 F - Déduction pour gain en capital – permis de pêche

Respecting a requested as to whether a corporation, to be a corporation referred to in subparagraph (a)(iv) of the definition of qualified farm or...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

14 September 2010 External T.I. 2010-0372631E5 F - Bien agricole admissible

The correspondent’s husband acquired the land (the “Land”) and other assets from his father in order to continue carrying on the family farm...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Paragraph 110.6(1.3)(c)

Administrative Policy

13 November 2014 External T.I. 2014-0536881E5 F - Bien agricole admissible - Boisé

In light of a woodlot having been acquired before June 18, 1987, CRA stated:

[I]n that case…only one or the other of the conditions set out in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

8 March 2012 External T.I. 2011-0426061E5 F - Bien agricole admissible

Ms. X, who was the owner of a farm including a barn and residence, took on the farming business for a number of years following her husband’s...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

12 January 2012 External T.I. 2011-0421791E5 F - Usufruit de terres boisées acquises avant 1987

Father, a retired person, who acquired woodlands from his father before 1987 gifts the bare ownership of the woodlands to his Child, while...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) - Paragraph 248(3)(a) gift of bare ownership resulted in deemed disposition to deemed s. 248(3)(a) personal trust 166

4 November 2011 Internal T.I. 2011-0413341I7 F - Bien agricole admissible

The taxpayer acquired farmland and rented 50% of it to an unrelated farm producer and 50% to a corporation that operated a nursery there and whose...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming nursery qualifies as farming if focused on growing rather than selling 107
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Share of the Capital Stock of a Family Farm or Fishing Corporation - Paragraph (a) - Subparagraph (a)(i) meaning of “actively engaged on a regular and continuous basis” requirement 152
Tax Topics - Income Tax Act - Section 70 - Subsection 70(10) - Child extended meaning of "child" 158
Tax Topics - Income Tax Act - Section 73 - Subsection 73(3) - Paragraph 73(3)(c) rollover unavailable where taxpayer rented out the land to a farmer 153

16 June 2008 External T.I. 2008-0270251E5 F - Bien utilisé dans une entreprise agricole

The Directorate indicated that in order to qualify as "property …used in the course of carrying on a farming business", the property must...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

30 May 2007 External T.I. 2006-0200271E5 F - Bien agricole et résidence principale

In the course of a general discussion, CRA stated:

In determining whether an asset is used principally in the business of farming, it is our view...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 40 - Subsection 40(4) s. 45(3) election did not extend time that farm house was a principal residence, once the occupant went to nursing home 350
Tax Topics - Income Tax Act - Section 45 - Subsection 45(3) no change of use when occupant of residence moved into a nursing home 131

Subparagraph 110.6(1.3)(c)(ii)

Administrative Policy

9 December 2011 Internal T.I. 2011-0399641I7 F - Bien agricole admissible et un lotissement

Respecting the qualified farm property status of a farm lot that was used as to 60% by Ms. X's husband in the course of carrying on market...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) subdivision does not by itself convert capital property to inventory 89

12 January 2011 Internal T.I. 2010-0375801I7 F - Bien agricole admissible détenu avant 1987

Mr. X engaged in market gardening from 1970 to his death on 1977 on 60% of his land (the balance being a non-commercial woodlot). His widow, who...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property property status of Quebec lands divided into cadastral lots was analyzed on a lot-by-lot basis 119

Subsection 110.6(2) - Capital gains deduction — qualified farm property

Cases

Fournie v. Cromarty, 2012 DTC 5011 [at 6563], 2011 ONSC 6587

The deceased owned three farm properties. He bequeathed one to the applicants but specified that "capital gains taxes and probate fees, if any,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Administrative Policy

3 February 2015 External T.I. 2015-0567231E5 - Qualified farm or fishing property

The taxpayer inherited land from her husband that that had been farmed by him and their son, but neither she nor her son continued the farming...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

7 January 2013 External T.I. 2012-0460791E5 - Qualified Farm Property & Oil Reserves

In response to a question "as to whether a taxpayer whose farm property meets the definition as a "qualified farm property" ("QFP") within the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 June 1992 External T.I. 5-920895

Where a father transfers farm property to his children under s. 73(3) and the children immediately thereafter dispose of the farm property to a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

6 September 89 T.I. (February 1990 Access Letter, ¶1117)

Where a farmer transfers his farm to his adult children pursuant to ss.73(3)(a) and (b) and immediately thereafter the children sell the farm...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

29 Aug. 89 T.I. (Jan. 90 Access Letter, ¶1085)

GAAR would not apply to a transaction whereby an individual transferred his qualified farm property to a wholly-owned subsidiary in consideration...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(2.1) - Capital gains deduction — qualified small business corporation shares

Administrative Policy

4 June 2012 External T.I. 2012-0439271E5 - QSBCS deduction by the beneficiary

Where an inter vivos personal trust has itself satisfied the 24-month holding test in para. (b) of the qualified small business corporation shares...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

28 May 2010 External T.I. 2010-0359871E5 F - Déduction pour gain en capital

Qualified small business corporation shares are disposed of by the taxpayer to a child for FMV proceeds during the taxpayer’s lifetime or on...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(a.1) - Subparagraph 84.1(2)(a.1)(ii) s. 84.1(2)(a.1)(ii) grind where parent claims s. 110.6(2.1) deduction on bequest to child 85

24 March 1994 External T.I. 9331645 - QUALIFIED SMALL BUSINESS CORPORATION SHARES

The capital gains exemption limits are calculated at the partner rather than the partnership level, given that a partnership is not a person for...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

11 January 1993 T.I. (Tax Window, No. 27, p. 14, ¶2358)

A capital gain realized on a cash distribution of paid-up capital on preferred shares that constitute qualified small business corporation shares...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) 54

18 Aug. 89 T.I. (Jan. 90 Access Letter, ¶1082)

Mr. A, who owned 100% of the common shares of Opco, transfers 1/2 of those shares to Opco in exchange for preferred shares of Opco having a fair...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

88 C.R. - F.Q.38

S.110.6(2.1) will apply to the realization of a $100,000 capital gain from the disposition of a qualified small business corporation share, and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Articles

Anthony Strawson, Timothy P. Kirby, "Vendor Planning for Private Corporations: Select Issues", 2017 Conference Report, (Canadian Tax Foundation), 11:1-28

Example of hybrid sale using safe income and long-term capital gains deduction where certain assets (e.g., building) are to be retained (pp....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Matthew Clark, Josh Proulx, Rami Pandher, "Hybrid Sales", Canadian Tax Highlights (Canadian Tax Foundation), Vol. 25, No. 5, May 2017, p. 4

Hybrid sale strategy depends on ability to recover the refundable tax (p. 4)

The refundable tax lies at the crux of the issue for hybrid sales. To...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(2.2)

Administrative Policy

26 March 2008 Internal T.I. 2007-0260291I7 F - Biens de pêche admissibles

In 2005, a fisherman disposed of his fishing licence to an unrelated person, and reported a capital gain in the 2005 taxation year. Since the sale...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(3)

Administrative Policy

11 September 1992 T.I. (Tax Window, No. 23, p. 18, ¶2176)

A person who is deemed to be resident in Canada by virtue of the sojourning rule in s. 250(1)(a) is eligible for the capital gains deduction...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

2 February 1990 T.I. (July 1990 Access Letter, ¶1329)

It is RC's position that an individual's taxation year ends on the date of his death. Accordingly, his death part way through the year is not...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Articles

Dunbar, "Forward Participation Share May Produce Tax-Exempt Gain With Minimal Downside Risk for Executive", Taxation of Executive Compensation and Retirement, February 1990

Issuance, at a nominal cash subscription price, of shares which only participate to the extent that the common shares increase in value, may...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Singer, "Revenue Canada Accepts Arrangements Designed to Make Capital Gains Exemption Available Under Employee Stock Purchase Plan", Taxation of Executive Compensation and Retirement, December 1989/January 1990

RC has indicated that it would not apply GAAR where Holdco, rather than Opco, undertakes to buy back shares issued to employees in stipulated...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(6) - Failure to report capital gain

See Also

Adams v. The Queen, 96 DTC 1737 (TCC)

A finding in previous tax evasion proceedings brought against the taxpayer that the taxpayer's gains from the disposition of real estate (and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Administrative Policy

5 July 2012 Internal T.I. 2010-0388551I7 F - Fiducie - retour de sommes

In the context of transactions in which capital gains on qualified small business corporation shares were purportedly distributed to children...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) s. 75(2) does not apply to an estate freeze as the corp does not own its treasury shares issued to the trust 164
Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) income distributed to daughter-in-law who in fact was not a beneficiary includible in her income under s. 105(1) but not deductible by trust under s. 104(6) 166
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) capital gain distributed by family trust to children and purportedly lent by them to their parents (also beneficiaries) was instead included in the parents’ income under s. 104(13) 419

93 C.R. - Q. 54

The fact that a taxpayer did not report a capital gain where he had reasonable grounds to believe that the disposition of the asset did not result...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

June 1990 Meeting of Alberta Institute of Chartered Accountants (November 1990 Access Letter, ¶1499, Q. 8)

A taxpayer will be allowed the capital gains deduction on all adjustments to include a capital gain previously not reported by him, unless the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(7) - Deduction not permitted

Administrative Policy

3 June 2014 External T.I. 2013-0503511E5 F - Discretionary Dividend Shares

Mr. X effects an estate freeze under which a portion of his Class A-1 shares of Opco (a small business corporation), being all the outstanding...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

9 March 1995 External T.I. 9430255 - BUTTERFLY REORG - CAPITAL GAINS ELECTION

Where two shareholders of a CCPC decided, in December 1993, to undertake a butterfly reorganization (which actually was undertaken in August 1994)...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

14 December 1992 Memorandum (Tax Window, No. 30, p. 4, ¶2488)

S.110.6(7)(b) will not apply to a transaction or a series of transactions intended to make shares of a company qualify as qualified small business...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

10 January 1992 CGA Roundtable, Q. 19, 7-912224

Where, in order to accommodate the sale by the other shareholder (Mr. A) of his shares of the corporation, Mr. B agrees that following the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

90 C.R. - Q19

Where one shareholder sells his shares of a corporation which has butterflied out a portion of its property to the other shareholder, whether the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

89 C.R. - Read Paper (C.18)

s. 110.6(7)(a) "is quite broad and is not restricted to obvious cases ..."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) 47

Articles

McKnight, "Hidden Problems in Selling Employee Ownership", Canadian Current Tax, October 1994, p. 7

Discussion of the use of market makers for the purchase of employee shares in private companies.

Paragraph 110.6(7)(b)

Administrative Policy

5 October 2012 APFF Roundtable Q. 13, 2012-0454181C6 F - Discretionary Dividend Shares

Mr. X holds 100 Class A voting participating shares of Opco with a fair market value of $5M and nominal adjusted cost base and paid-up capital. He...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) discretionary dividend shares issued for nominal consideration 195
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) general policy against conferring a benefit on a corporation 205

24 October 2012 Internal T.I. 2012-0456711I7 F - Inadmissibilité à la déduction pour GC

Mr. A effected an estate freeze by converting his Class "AA" shares of Opco into Class "F" Opco shares. S. 51(2) has been applied to determine...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2) no retroactive adjustment of capital gains exemption where claimed before the normal reassessment period 192
Tax Topics - Income Tax Act - Section 248 - Subsection 248(10) concept of a related transaction requires "more than a mere possibility"/retrospective attachment of related transaction 222

11 July 2006 External T.I. 2005-0152031E5 F - Actions admissibles de petite entreprise

A couple will transfer a co-owned immovable – that is used 75% in the operation of an active business of a corporation owned by one of them and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation building used 75% in the corporation’s active business operations and 25% for rental use would qualify 81

Subsection 110.6(8) - Deduction not permitted

Administrative Policy

8 March 1994 External T.I. 9329275 F - Capital Gains Exemption

The determination of what is a significant part of a capital gain in many cases can be ascertained by reference to the proportion or percentage of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

17 November 1992 T.I. 903665 (September 1993 Access Letter, p. 417, ¶C109-143)

Where an individual transfers non-prescribed shares that have an ACB of nil and a fair market value of $200,000, $35,000 of which is attributable...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

92 C.R. - Q.56

RC has no mechanical guidelines as to what constitutes "a significant part of the capital gain", but it is prepared to give advance rulings.

1992 A.P.F.F. Annual Conference, Q. 8 (January - February 1993 Access Letter, p. 53)

Where a corporation has issued voting participating shares that are not prescribed shares because of the conversion privilege, the average annual...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1992 A.P.P.F. Annual Conference, Q. 7 (January - February 1993 Access Letter, p. 52)

Where shares issued prior to May 23, 1985 on an s. 85 rollover have a paid-up capital equal to the market value of the transferred property, a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 February 1992 T.I. (Tax Window, No. 17, p. 4, ¶1762)

The gain on a disposition of common shares of a corporation could be tainted by the non-payment of dividends on preferred shares of that...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

10 January 1992 Memorandum (Tax Window, No. 17, p. 13, ¶1773)

Where an individual holds all the common shares and preferred shares of B Ltd., and there is an accrued gain of $400,000 on the common shares,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

30 November 1991 Round Table (4M0462), Q. 11.3 - Scope of Subsection: 110.6(8) of the I.T.A. (C.T.O. September 1994)

The test in s. 110.6(8) is based on the total gain rather than on the portion thereof that is exempt. In a situation where the unpaid dividends on...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

10 and 11 July 1991 T.I. (Tax Window, No. 6, p. 11, ¶1347)

Where no dividends are paid on preferred shares while they are outstanding and on their redemption, it is a question of fact whether a significant...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

24 June 1991 T.I. (Tax Window, No. 4, p. 2, ¶1313)

Where, in order to satisfy the 24-month asset test, it is agreed between the vendor of shares and the purchaser that the vendor's common shares...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) 51

15 February 1991 T.I. (Tax Window, Prelim. No. 3, p. 24, ¶1120)

A reasonable and prudent investor should normally expect to receive dividends on preferred shares relating to the issue price paid therefor....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

20 March 1990 T.I. (August 1990 Access Letter, ¶1380)

$200,000 of the accrued gain of $1 million on shares (having a nominal ACB) of Opco, whose sole shareholder is Mr. A, is attributable to the fact...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

21 February 1990 T.I. (July 1990 Access Letter, ¶1330)

The provisions of s. 110.6(8) should not apply to preferred shares with a paid-up capital and redemption amount equal to the fair market value of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

31 January 1990 T.I. (June 1990 Access Letter, ¶1269)

Where 90% of the common shares of Opco owned by Father were exchanged for redeemable preference shares under an s. 86 reorganization, insufficient...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

87 C.R. - Q.60

RC will not rule on the factual question of whether a gain is attributable to a low dividend rate.

Articles

Brender, "The De Minimis Dividend Test Under Subsection 110.6(8)", 1993 Canadian Tax Journal, Vol. 41, No. 4, p. 808.

Subsection 110.6(9) - Average annual rate of return

Administrative Policy

11 October 2013 APFF Roundtable, 2013-0495641C6 F - Taux de rendement annuel moyen

X and Y, who deal with each other at arm's length, each effect an estate freeze, by exchanging their 100 common shares of Opco (i.e., 50 shares...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

18 May 1994 External T.I. 9407415 - CAPITAL GAINS EXEMPTION

In response to a question as to whether the "average annual rate of return" is calculated based on the original issue price of shares, RC stated...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

14 June 1990 T.I. (November 1990 Access Letter, ¶1528)

Where in 1982 prior to the introduction of Part II tax, the shareholders of Opco transferred each common share of Opco to Holdco in consideration...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

7 June 1990 Memorandum (November 1990 Access Letter, ¶1529)

If upon the issuance of the shares in question it was understood that the profits of the corporation would be reinvested, the expected rate of...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(14) - Related persons, etc.

Paragraph 110.6(14)(a)

Administrative Policy

2 May 2013 External T.I. 2013-0481361E5 F - Ordre de disposition d'actions AAPE

The 300 outstanding shares of Corporation A are held by three unrelated individuals (A, B and C) as to 100 each. After the death of C, A and B...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

19 September 1990 T.I. (Tax Window, Prelim. No. 1, p. 14, ¶1031)

Where on an amalgamation of A Co. and B Co., the shareholder receives 100 shares of Amalco of which 90 were in exchange for his A Co. shares and...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Paragraph 110.6(14)(b)

See Also

Pellerin v. The Queen, 2015 TCC 130 (Informal Procedure)

At approximately 18 months of age, Mika Pellerin received a distribution under s. 107(2) of small business corporation shares from the family...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share relatedness under the 24-month test is tested only at the determination time 411

Chartier and Nadeau v. The Queen, 2008 DTC 4627, 2007 TCC 37

On the same day that the owners of non-voting shares agreed to sell those shares and 49% of the voting shares of a corporation to a non-resident...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Administrative Policy

13 January 2012 Internal T.I. 2011-0428371I7 - Paragraph 110.6(14)(b)

certain share put/cal rights contained in a unanimous shareholders agreement would not be considered to be rights "under" a purchase and sale...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

88 C.R. - F.Q.39

Routine example.

Paragraph 110.6(14)(c)

Administrative Policy

May 1991 Question and Answer for a Conference (Tax Window, No. 3, p. 17, ¶1223)

Where an individual who owns shares of a corporation bequeathed those shares to his son who in turn sold the shares to his wife, the son's wife...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Articles

David Carolin, Manu Kakkar, Stan Shadrin, "Capital Gains Exemption Planning, Trusts, and the 24-Month Holding Period Rule", Tax for the Owner-Manager, Vol. 21, No. 3, July 2021, pp. 2-3

Ss. 110.6(14)(c)(i) and (ii)

  • S. 110.6(14)(c) may assist in satisfying the test in the qualified small business corporation (QSBC) definition in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subparagraph 110.6(14)(c)(ii)

Articles

David Carolin, Manu Kakkar, "Are Persons Related to Themselves? CGE Planning and the 24-Month Holding Period Rule", Tax for the Owner-Manager, Vol. 21, No. 4, October 2021, p. 3

  • Unlike the concept of “affiliated person,” as to which s. 251.1(4)(a) provides that all persons are affiliated with themselves, persons are...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Paragraph 110.6(14)(d)

Administrative Policy

21 April 2010 External T.I. 2009-0341711E5 F - Déduction pour gains en capital

Can an individual, who has been a member for over 24 months of a partnership ("Partnership") that disposes of qualified small business corporation...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

3 June 2009 External T.I. 2009-0310231E5 F - Exonération des gains en capital

X and Y for at least 24 months held equal interests in a partnership ("SNC") that owned, during that 24-month period, all of the shares of ABC...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Paragraph 110.6(14)(e)

Administrative Policy

22 March 1991 T.I. (Tax Window, No. 2, p. 22, ¶1220)

S.110.6(14)(e) extends the definition of "related persons" for purposes of the enhanced capital gains exemption.

Paragraph 110.6(14)(f)

Administrative Policy

3 March 2014 External T.I. 2014-0519071E5 F - Période de détention de 24 mois pour AAPE

X and Y have been the partners for more than 24 months in a partnership ("SENC,") which for over 24 months has held all the shares of a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

21 November 2011 External T.I. 2011-0424331E5 - ITA 110.6(14)(f)

respecting the situation where an unincorporated business operating under a lease of the land and building from a related corporation transfers...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

92 C.R. - Q.55

A spousal trust will be deemed to be related to the deceased spouse for purposes of the requirement that, at the time of disposition of shares by...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

90 C.R. - Q17

The fact that Newco was incorporated and received $1 on the issuance of one common shares five months prior to the incorporation of the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

1 May 1990 T.I. (October 1990 Access Letter, ¶1473)

In the situation where a limited partnership wishes to roll the partnership assets into a corporation, if the activity of the general party...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

88 C.R. - "Small Business Corporation Shares" - "Deemed Ownership of Shares by an Unrelated Person Prior to Issuance"

Where, following an offer for all of the assets of a proprietorship except a building representing 1/2 of the fair market value of the assets, the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

88 C.R. - F.Q.37

If property which is owned by the sole shareholder of a corporation but is used by the corporation in its business is transferred to the...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subparagraph 110.6(14)(f)(ii)

Cases

Gillen v. Canada, 2019 FCA 62

The availability of the enhanced capital gains exemption to the beneficiaries of three unrelated family trusts depended on the proposition that a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 85 - Subsection 85(2) beneficial drop-down of assets to corporation occurred 4 months before the share consideration was issued 123

See Also

Gillen v. The Queen, 2017 TCC 163, aff'd 2019 FCA 62

A corporation (“Kinderock”) owned by the taxpayer and his wife applied, commencing on October 4, 2007, to the Saskatchewan government for...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Words and Phrases
use
Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership test of beneficial ownership 112
Tax Topics - General Concepts - Effective Date relation-back theory applied: closing retroactively confirmed previous beneficial ownership transfer 255

Administrative Policy

18 October 2004 External T.I. 2004-0077151E5 F - Déduction pour gain en capital

CRA agreed that:

  • where an individual shortly after commencing a proprietorship, transfers all of the assets used such active business to a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (e) para. (e) effectively requires a combined 24-month holding period for s. 110.6(14)(f)(i) or (iii) transactions 149

Clause 110.6(14)(f)(ii)(A)

Administrative Policy

21 November 2011 External T.I. 2011-0426481E5 F - Actions admissibles de petite entreprise

The individual transfers all of the assets of a business carried on by the individual, including the leasehold interest in a building, to a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(15) - Value of assets of corporations

Administrative Policy

1993 A.P.F.F. Round Table, Q.13

The insolvency of a corporation or a dispute regarding the payment of life insurance proceeds could be a valid reason for extending the 24-month...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Paragraph 110.6(15)(a)

Administrative Policy

7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 9, 2016-0651801C6 F - Assurance-vie à assurés multiples-110.6(15)

A corporation is the owner of (and pays the premiums on) a policy providing for payment of the benefit on the death of the survivor of Mr X (its...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation corporate-owned policy valued for SBC or QSBCS purposes at the cash surrender value even if non-shareholder lives are included 95

Finance

6 October 2017 APFF Financial Strategies and Instruments Roundtable, Q.3

The two individual shareholders (A and B) of a small business corporation (an SBC) agree that on the disability of either of them, his shares will...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subparagraph 110.6(15)(a)(ii)

Administrative Policy

14 March 2013 External T.I. 2013-0473981E5 F - JVM d'une police d'assurance-vie - SEPE

A corporation (the "Corporation") holds a life insurance policy on the life of its shareholder Mr. X (the “Insured"), that has a nil cost and a...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation corporate life insurance policy and proceeds therefrom valued at CSV until share redemption time 123

Subsection 110.6(19) - Election for property owned on February 22, 1994

See Also

McCullock-Finney (Estate) v. The Queen, 2017 TCC 103 (Informal Procedure)

The taxpayer disposed of two rental properties in 2010 and calculated her capital gain on the basis that the properties’ adjusted cost base had...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Sicurella v. The Queen, 2013 DTC 1124 [at 662], 2013 TCC 79 (Informal Procedure)

The taxpayer filed an election under s. 110.6(19) in respect of a seven-unit rental building on the basis that its adjusted cost base was $131,250...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Bullard Estate v. The Queen, 2004 DTC 2717, 2004 TCC 249

After agreeing with counsel for both parties that under s. 32 of the Interpretation Act (Canada) "defects in form are acceptable but defects in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 45 - Subsection 45(2) 106

Administrative Policy

7 July 2006 Internal T.I. 2006-0185961I7 F - Choix en vertu de 110.6(19) - Impact sur la FNACC

CRA provided a detailed numerical example regarding the disposition of a building to which s. 13(7)(e)(iii) had applied as a result of a prior s....

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(a) recognition of recapture shielded the taxpayer from recognizing capital gain 70

7 July 2005 External T.I. 2005-0122191E5 F - Erroneous Elections in Statute-barred Years

An individual (X) transferred all the shares of Bco to Aco in exchange for a note and common shares, electing under s. 85(1) at an amount thought...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(c.1) no need to amend the s. 85(1) election where the agreed amount was less than the s. 85(1)(c.1) floor 93
Tax Topics - Income Tax Act - Section 85 - Subsection 85(7) no need to amend the s. 85(1) election where automatic s. 85(1)(c.1) adjustment 55

5 January 1996 Internal T.I. 9525957 - PRICE ADJUSTMENT CLAUSES AND C.G. ELECTIONS

A price adjustment clause cannot be used in conjunction with an s. 110.6(19) election.

16 February 1995 Mississauga Breakfast Seminar, Q. 2, (C.T.O. "Capital Gains Election", Fax Service Doc. No. 503120)

Discussion of utilization of election in a situation where the housing unit is situate on land whose area exceeds the 1/2 hectare principal...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

16 February 1995 Mississauga Breakfast Seminar, Q. 1, (C.T.O. "Capital Gains Election", Fax Service Doc. No. 9503120)

In a situation where there are two or more capital beneficiaries of a trust and only one beneficiary has not fully utilized her capital gains...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(20) - Application of subsection (19)

Administrative Policy

16 February 1995 Mississauga Breakfast Seminar, Q. 3

S.13(21.1) will not apply where a s. 110.6(19) election is filed in respect of a building because the election under s. 110.6(19) will only be...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Subsection 110.6(31)

Administrative Policy

3 August 2018 Internal T.I. 2018-0755351I7 - Trust claiming CG reserve

In response to questions as to whether the lifetime capital gains exemption (LCGE) was available where a personal trust claimed a capital gains...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(21.2) flow-through of s. 110.6 treatment respecting distributed capital gains reserve 174