Section 120.4

Subsection 120.4(1) - Definitions

Arm's Length Capital

Excluded Amount

Administrative Policy

26 March 2013 External T.I. 2012-0465001E5 - kiddie tax

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Articles

Paragraph (a)

Paragraph (b)

Paragraph (d)

Paragraph (e)

Subparagraph (e)(ii)

Administrative Policy

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) no excluded share exception where interposition of family trust or holdco 121
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) keeping time logs will “ensure that businesses are able to comply with the new rules” 173
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of pizzeria but not hair salon were excluded 232

Paragraph (g)

Articles

Govindadeva Bernier, Tim Scholz, "Income Sprinkling Using Private Corporations", Office of the Parliamentary Budget Officer (with thanks to “Finance Canada officials for their helpful technical discussions”), 8 March 2018

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Excluded Business

Administrative Policy

Articles

Excluded Shares

Administrative Policy

29 May 2018 STEP Roundtable, Q.7

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29 May 2018 STEP Roundtable, Q.6

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29 May 2018 STEP Roundtable, Q.5

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Words and Phrases
income

Articles

Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) no excluded share exception where interposition of family trust or holdco 121
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds” 158
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) keeping time logs will “ensure that businesses are able to comply with the new rules” 173

8 May 2018 CALU Roundtable Q. 6, 2018-0745871C6 - Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (c) shares of a holding company generally do not qualify as excluded shares 153

Paragraph (b)

Administrative Policy

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds” 158
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) keeping time logs will “ensure that businesses are able to comply with the new rules” 173
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of pizzeria but not hair salon were excluded 232

Paragraph (c)

Administrative Policy

8 May 2018 CALU Roundtable Q. 6, 2018-0745871C6 - Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) services/property distinction informed by rationale of the safe harbour exclusions 256

Reasonable Return

Administrative Policy

Paragraph (b)

Articles

Govindadeva Bernier, Tim Scholz, "Income Sprinkling Using Private Corporations", Office of the Parliamentary Budget Officer (with thanks to “Finance Canada officials for their helpful technical discussions”), 8 March 2018

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Kevyn Nightingale, "Private Company Income-Splitting Proposal Part 3: The Government Responds", Tax Topics (Wolters Kluwer), No. 2389-90, December 21, 2017, p. 1

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Finance

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Related Business

Split Income

Administrative Policy

Paragraph (c)

Administrative Policy

6 July 2018 External T.I. 2018-0759521E5 - Tax on split income & preferred beneficiary

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(14) split income rules do not apply to preferred beneficiary income 87

10 March 2014 Internal T.I. 2013-0493971I7 F - Application of section 120.4

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1.1) allocation of income to partner not responsible for expenses 177
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1) income-splitting partnership terms 146

11 October 2013 APFF Roundtable, 2013-0495651C6 F - Revenu fractionné

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) streaming of split and non-split income between trust beneficiaries 94

Articles

Joseph Frankovic, "Income Splitting and Attribution", Tax Topics, Wolters Kluwer, No. 2250, April 23, 2015

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Subparagraph (c)(ii)

Clause (c)(ii)(C)

Administrative Policy

Clause (c)(ii)(D)

Administrative Policy

9 October 2015 APFF Roundtable Q. 2, 2015-0595521C6 F - Meaning of "actively engaged"

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Split Portion

Paragraph (b)

Finance

2017 CTF Finance Roundtable, Q.7

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Articles

Kevyn Nightingale, "Private Company Income Splitting: Part 2 – Observations", Tax Topics (Wolters Kluwer), No. 2371, 17 August 2017, p. 1

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Subsection 120.4(1.1)

Paragraph 120.4(1.1)(a)

Administrative Policy

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) no excluded share exception where interposition of family trust or holdco 121
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds” 158
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of pizzeria but not hair salon were excluded 232

Paragraph 120.4(1.1)(b)

Paragraph 120.4(1.1)(c)

Paragraph 120.4(1.1)(d)

Subsection 120.4(3)

Articles

Joint Committee, "Legislative Proposals to Address Income Sprinkling Released December 13, 2017", 8 March 2018 Joint Committee Submission

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Govindadeva Bernier, Tim Scholz, "Income Sprinkling Using Private Corporations", Office of the Parliamentary Budget Officer (with thanks to “Finance Canada officials for their helpful technical discussions”), 8 March 2018

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Subsection 120.4(4) - Taxable capital gain

Administrative Policy

10 June 2013 STEP Roundtable, 2013-0480261C6 - 2013 STEP Roundtable Question 1

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