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...
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...
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...
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...
Paragraph (a)
Administrative Policy
16 November 2001 External T.I. 2000-0054435 F - BIENS AGRICOLES ADMISSIBLES
A general partnership of four individuals that owned a farm that was used in the Canadian farming operation of a Canadian-controlled private...
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...
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...
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...
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...
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...
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...
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...
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....
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...
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 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...
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...
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...
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...
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...
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...
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...
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...
9 February 2004 External T.I. 2003-0004401E5 F - Bien agricole admissible - fiducie
Trust A, an inter vivos trust, with the son and daughter of two brothers (Mr. A and Mr. B) as the beneficiaries, acquired land in 2002 and leased...
20 January 2004 External T.I. 2003-0030291E5 F - Bien agricole admissible
The taxpayers inherited agricultural land from their father prior to June 18, 1987, but made the election under s. 110.6(19) to step up the ACB of...
23 October 2003 External T.I. 2003-0017935 F - BIEN AGRICOLE ADMISSIBLE
S. (a)(vi)(A) of the former definition of "qualified farm property" required a comparison of the taxpayer’s gross revenue from his farming...
10 April 2003 External T.I. 2002-0152065 F - DEFINITION D'AGRICULTURE
A veterinarian practising exclusively with farmers in his region then sells his goodwill, mainly related to the sale of medicine to his farmer...
21 February 2002 External T.I. 2001-0102405 F - ACTIVITE AGRICOLE-ERABLIERE
A taxpayer operating a maple sugar bush has a sugar shack that he and employees use to produce maple syrup and to serve meals, with the latter...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
21 December 2001 External T.I. 2001-0091615 F - PART-SOCIETE DE PERSONNES AGRICOLE
Mr. X transferred all of his farm property (which he had farmed for 30 years) to a newly formed partnership (which continued the farming business)...
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...
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...
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...
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...
Twomey v. The Queen, 2012 DTC 1255 [at 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...
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...
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...
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...
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...
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...
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%...
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...
10 October 2003 Roundtable, 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...
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...
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...
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...
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...
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...
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...
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%),...
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,...
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...
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...
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...
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...
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...
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...
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...
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...
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,...
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...
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...
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...
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,...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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....
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...
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,...
Paragraph (c)
Administrative Policy
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...
22 April 2003 External T.I. 2002-0169565 F - ACTIF UTILISE DANS L'ENTREPRISE
A corporation (i) carrying on a processing business has tax credits receivable respecting its SR&ED expenditures for the year or Quebec refundable...
5 February 2003 External T.I. 2002-0157445 F - AAPE ACTION ADM PETITE ENTREPRISE
CCRA considered it to be a question of fact whether shares of a corporation engaged in a business of trading listed shares were QSBCs.
2 October 2000 External T.I. 2000-0015825 F - ACTIFS AUX FINS DE LA LOI
CCRA indicated that, for the purposes of the “qualified small business corporation share” and “small business corporation” definitions, is...
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...
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...
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...
Paragraph (d)
Administrative Policy
2 November 2023 APFF Roundtable Q. 3, 2023-0984441C6 F - Qualified small business corporation share - meaning of "all or substantially all" and "asset"
An individual holds the common shares of Holdco having an FMV of $1 million, and Holdco’s only asset is the common shares of Opco, also with an...
Paragraph (e)
Administrative Policy
4 January 2022 External T.I. 2015-0607531E5 F - Action admissible de petite entreprise
- On January 1, Year 1, Mr. X (and Mr. Y) exchanged their 10 (and 90) common shares of Opco for 100 (and 900) preferred shares of Opco.
- They also...
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...
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...
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...
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,”...
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...
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...
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...
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,...
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...
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...
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...
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...
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...
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...
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...
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...
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...
Paragraph 110.6(1.3)(a)
Administrative Policy
20 June 2023 STEP Roundtable Q. 15, 2023-0963801C6 - Interpretation of clause 110.6(1.3)(a)(ii)(A)
Mr. A owned farmland and farmed it for his chief source of income. Under his will, the farmland was devised to his daughter who does not farm it...
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...
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...
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...
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...
Subparagraph 110.6(1.3)(a)(ii)
Clause 110.6(1.3)(a)(ii)(A)
Subclause 110.6(1.3)(a)(ii)(A)(II)
Administrative Policy
13 June 2023 External T.I. 2021-0891701E5 - Property used principally in a farming business
A 70-acre property of the taxpayer consisted of 25 acres of workable farmland, and 45 acres of forest which had never been used in farming....
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
Subsection 110.6(2) - Capital gains deduction — qualified farm property
Cases
Fournie v. Cromarty, 2012 DTC 5011 [at 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,...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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....
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...
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...
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...
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...
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...
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...
Subsection 110.6(6) - Failure to report capital gain
See Also
Adams v. The Queen, 96 DTC 1737, [1996] 3 CTC 2592 (TCC) (Informal Procedure)
A finding in previous tax evasion proceedings brought against the taxpayer that the taxpayer's gains from the disposition of real estate (and...
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...
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...
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...
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...
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)...
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...
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...
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...
89 C.R. - Read Paper (C.18)
s. 110.6(7)(a) "is quite broad and is not restricted to obvious cases ..."
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...
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...
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...
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...
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...
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...
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...
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...
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,...
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...
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...
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...
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....
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
88 C.R. - F.Q.39
Routine example.
Articles
Kim Maguire, Jeffrey Shafer, "Trends in Buy/Sell Transactions", draft 2021 Conference Report
Accessing the s. 110.6(14)(b) exception under a plan of arrangement (pp. 12-13)
- S. 110.6(14)(b) provides that, regarding whether a corporation is...
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...
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...
Subparagraph 110.6(14)(c)(ii)
Administrative Policy
7 May 2003 External T.I. 2002-0164995 F - SENS DE ENSEMBLE DES BENEFICIE
All of the persons designated as the beneficiaries of a trust were related to Bco, but there were unrelated persons included in the class of...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
Subparagraph 110.6(14)(f)(i)
Administrative Policy
4 January 2022 External T.I. 2015-0607531E5 F - Action admissible de petite entreprise
S. 110.6(14)(f)(i) provides that, for purposes of the requirement in s. 110.6(1)(b) that mooted qualified small business corporation shares...
29 October 2003 External T.I. 2003-0026355 F - ECHANGE D'ACTIONS
Mr. A held, who had held Class B preferred shares of a corporation, with a value exceeding $500,000, for over two years, transferred his preferred...
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...
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...
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...
11 June 2003 External T.I. 2002-0175975 F - TRANSFERT-ENT. EXPLOITEE ACTIVEMENT
ABC Inc. ("ABC") carried on a seasonal business that was experiencing financial difficulties. The XY partnership ("XYP") between two of the...
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...
14 May 2002 External T.I. 2001-0105925 F - TOTALITE DES ACTIFS DE L'ENTREPRISE
Under an agreement between a pharmacist and a corporation which was wholly owned by the pharmacist and engaged in the sale of non-pharmaceutical...
28 February 2001 External T.I. 2000-0016765 F - All or substantially all
Regarding the meaning of the expressions “all or substantially all the assets used in an active business” in ss. 110.6(14)(f)(ii)(A) and 54.2,...
Paragraph 110.6(14)(g)
Administrative Policy
4 April 2002 External T.I. 2001-0103735 F - Fiducie exclusive au conjoint et ass.-vie
A spousal trust for the widow (Ms. A) of Mr. A held shares of Opco which, in turn, was the owner and beneficiary of a policy that became payable...
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...
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...
4 April 2002 External T.I. 2001-0103735 F - Fiducie exclusive au conjoint et ass.-vie
A spousal trust for the widow (Ms. A) of Mr. A held shares of Opco which, in turn, was the owner and beneficiary of a policy that became payable...
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...
Subparagraph 110.6(15)(a)(i)
Administrative Policy
2 May 2002 External T.I. 2002-0134335 F - Sous-aliéna 104(4)a)(i) et 110.6(15)a)(i)
In finding that the deeming rule in s. 110.6(15)(a)(i) does not apply regarding a deemed disposition under s. 104(4)(a)(i), CCRA...
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...
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...
Sicurella v. The Queen, 2013 DTC 1124 [at 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...
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...
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....
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...
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...
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...
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...
Subsection 110.6(27)
Administrative Policy
7 January 2004 Internal T.I. 2003-0046717 F - MODIFICATION DE PBR INSCRIT SUR T664
The taxpayer’s election pursuant to s. 110.6(19) understated the ACB of the subject shares. Could the ACB on the election now be amended to...
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...