Section 120.4

Table of Contents

Subsection 120.4(1) - Definitions

Arm's Length Capital

Administrative Policy

5 October 2018 APFF Roundtable Q. 13, 2018-0778661C6 F - Tax on Split Income

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares returns to a spouse and older children from a Holdco in which they reinvested their Opco capital gains exemption could qualify as excluded amounts 303
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) amounts not derived from a business were excluded amounts 149

Articles

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)(i)

Administrative Policy

11 June 2019 External T.I. 2019-0795291E5 F - Tax on Split Income - 120.4(1) excluded amount

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Related Business no TOSI tax applied to a dividend received from the surviving step-mother’s company 213

27 November 2018 CTF Roundtable Q. 9, 2018-0779981C6 - TOSI–Excluded Amount - Non-Related Bus. Exception

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares investment business a business for excluded share purposes 159

2 November 2018 External T.I. 2018-0771861E5 - TOSI: Second generation income

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(d) amounts derived from a related business do not include capital gains from the passive investment of the dividends therefrom 255

5 October 2018 APFF Roundtable Q. 13, 2018-0778661C6 F - 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 returns to a spouse and older children from a Holdco in which they reinvested their Opco capital gains exemption could qualify as excluded amounts 303
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Arm's Length Capital no exclusion for arm’s length capital contribution where contribution derived from capital gain from related business 195

5 October 2018 APFF Roundtable Q. 11, 2018-0768821C6 F - Tax on Split Income

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Related Business - Paragraph (a) - Subparagraph (a)(i) stock market investing business of child's holdco not a related business as father not involved 284

Subparagraph (e)(ii)

Administrative Policy

6 August 2019 External T.I. 2019-0792001E5 F - Tax on split income and excluded business

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) paid but non-worked days do not count 176
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(d) - Subparagraph 120.4(1.1)(d)(iii) same-year limitation of the exclusion for income derived from the proceeds of an excluded business 223

19 August 2019 External T.I. 2019-0814181E5 - TOSI - interpretation of "excluded business"

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business - Paragraph (b) drop-down of business does not restart the 5-year count 252

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

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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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Subparagraph (g)(i)

Administrative Policy

5 October 2018 APFF Roundtable Q. 9, 2018-0768801C6 F - Tax on Split

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) portfolio investment company might qualify as having a business 480

Subparagraph (g)(ii)

Administrative Policy

7 August 2019 External T.I. 2019-0814161E5 - Application of Reasonable Return - TOSI

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Reasonable Return shares subscribed for out of a joint bank account should not be treated as having been funded by a passive spouse in applying the reasonable return TOSI exception 240

Excluded Business

Administrative Policy

7 June 2019 STEP Roundtable Q. 4, 2019-0799911C6 - TOSI & Meaning of Excluded Business

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) spouse on achieving 20-hour threshold could receive large dividends as excluded amounts 115

7 June 2019 STEP Roundtable Q. 3, 2019-0799901C6 - TOSI and Hours Worked

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) falling below 20 hours not presumptive 74

3 December 2018 CPA Canada Roundtable, 2018-0773811C6 - Tax on Split Income (TOSI)

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26 September 2018 External T.I. 2018-0770911E5 - Revised income sprinkling rules

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) parental leave need not detract from satisfying the regular, “continuous” and substantial TOSI test 227

Articles

Paragraph (a)

Administrative Policy

11 October 2019 APFF Roundtable, Q.18

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Reasonable Return potential application of reasonable return exception where on mat leave or disability 201

Paragraph (b)

Administrative Policy

19 August 2019 External T.I. 2019-0814181E5 - TOSI - interpretation of "excluded business"

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) 5-year excluded business exception can take into account involvement while business held by predecessor 148

27 February 2019 External T.I. 2018-0783741E5 - TOSI and the meaning of "Excluded Business"

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Excluded Shares

Administrative Policy

7 November 2018 External T.I. 2018-0777361E5 - TOSI and dividend income, including from a trust

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) general discussion of s. 120.4(1.1)(b) 313

27 November 2018 CTF Roundtable Q. 10, 2018-0780081C6 - TOSI – Excluded Shares & Related Business

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27 November 2018 CTF Roundtable Q. 9, 2018-0779981C6 - TOSI–Excluded Amount - Non-Related Bus. Exception

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) “derivation” for TOSI purposes of dividends from previously earned income from a related business 273

5 October 2018 APFF Roundtable Q. 13, 2018-0778661C6 F - 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) - Arm's Length Capital no exclusion for arm’s length capital contribution where contribution derived from capital gain from related business 195
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) amounts not derived from a business were excluded amounts 149

29 May 2018 STEP Roundtable Q. 7, 2018-0744031C6 - Excluded Shares

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29 May 2018 STEP Roundtable Q. 6, 2018-0743971C6 - Excluded Shares – Holding Company

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29 May 2018 STEP Roundtable Q. 5, 2018-0743961C6 - Tax on Split Income

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Words and Phrases
income

Articles

Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

Tax on split income – Excluded shares (CRA webpage) 10 July 2019

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3 December 2018 CPA Canada Roundtable, 2018-0773811C6 - Tax on Split Income (TOSI)

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5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 2, 2018-0765791C6 F - Tax on Split Income

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5 October 2018 APFF Roundtable Q. 9, 2018-0768801C6 F - Tax on Split

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (g) - Subparagraph (g)(i) inactive spouse could receive excluded amount dividends from Holdco if its income was from an active business of reinvesting Opco dividends 259

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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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

21 August 2018 External T.I. 2018-0771811E5 - 120.4 Excluded Shares

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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

9 August 2019 External T.I. 2019-0813021E5 - TOSI and excluded shares

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Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) partner carries on business of partnership 100

12 June 2019 External T.I. 2019-0792011E5 F - TOSI definition excluded shares

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(d) income derived from related business included income from reinvesting sales proceeds from sale thereof in preceding year 112

24 May 2019 External T.I. 2019-0802331E5 - TOSI and excluded shares

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

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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

11 October 2019 APFF Roundtable, Q.18

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business - Paragraph (a) loss of excluded business exception when specified individual went on extended mat leave or disability 310

7 August 2019 External T.I. 2019-0814161E5 - Application of Reasonable Return - TOSI

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (g) - Subparagraph (g)(ii) broad construction of reasonable return exception would violate TOSI policy 219

2 November 2018 External T.I. 2018-0771851E5 - TOSI: Meaning of Reasonable Return

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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

Administrative Policy

11 June 2019 External T.I. 2019-0795291E5 F - Tax on Split Income - 120.4(1) excluded amount

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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)(i) dividend received from widowed step-mother's company was not re a related business 130

Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

5 October 2018 APFF Roundtable Q. 11, 2018-0768821C6 F - 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)(i) dividends derived from stock portfolio of Holdco excluded because stock portfolio not a related business or not a business 435

Subparagraph (a)(ii)

Administrative Policy

3 December 2018 CPA Canada Roundtable, 2018-0773811C6 - Tax on Split Income (TOSI)

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5 October 2018 APFF Financial Strategies and Financial Instruments Roundtable Q. 3, 2018-0765801C6 F - 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) - Split Income - Paragraph (e) - Subparagraph (e)(ii) deemed s. 104(21) capital gains retained their character as stock market gains 177
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(c) - Subparagraph 120.4(1.1)(c)(ii) s. 120.4(1.1)(c)(ii) exclusion where investment portfolio business of spousal trust had been carried on directly by deceased husband 322

Paragraph (c)

Articles

Subparagraph (c)(i)

Clause (c)(i)(B)

Administrative Policy

5 October 2018 APFF Roundtable Q. 10, 2018-0768811C6 F - Related business and subsection 120.4(1)

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Split Income

Administrative Policy

Paragraph (a)

Subparagraph (a)(i)

Administrative Policy

7 June 2019 STEP Roundtable Q. 14, 2019-0798511C6 - TOSI and PBE

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(19) designation can be avoided by including dividend in "other income" box 102

7 June 2019 STEP Roundtable Q. 13, 2019-0798501C6 - TOSI and PBE

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (c) exclusion inapplicable to dividend income flowed through to a preferred beneficiary 162

5 October 2018 APFF Roundtable Q. 12, 2018-0768831C6 F - Tax on Split Income and Partnership

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1.1) having non-contributing children as members of a family stock market partnership is subject to challenge under s. 103 81
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1.8) having non-contributing children in a family portfolio investment partnership subject to potential challenge under ss. 74.1 and 96(1.8) 89

Paragraph (c)

Administrative Policy

7 June 2019 STEP Roundtable Q. 13, 2019-0798501C6 - TOSI and PBE

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (a) - Subparagraph (a)(i) no exclusion for dividend income flowed out to preferred beneficiary 104

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

28 March 2012 External T.I. 2011-0422531E5 F - Revenu fractionné

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Clause (c)(ii)(D)

Administrative Policy

5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 4, 2018-0765811C6 F - Tax on Split Income

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(c) - Subparagraph 120.4(1.1)(c)(ii) exclusion where rental portfolio of spousal trust was a directly-conducted business of deceased husband 302

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

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Paragraph (d)(i)

Administrative Policy

11 October 2019 APFF Roundtable, Q.15

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Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(5) - Paragraph 108(5)(a) source character of trust income maintained in the absence of s. 108(5)(a) appplication 52

Paragraph (e)

Subparagraph (e)(ii)

Administrative Policy

5 October 2018 APFF Financial Strategies and Financial Instruments Roundtable Q. 3, 2018-0765801C6 F - 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) - Related Business - Paragraph (a) - Subparagraph (a)(ii) related business if children manage investment business of trust whose interest income is distributed to mother 431
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(c) - Subparagraph 120.4(1.1)(c)(ii) s. 120.4(1.1)(c)(ii) exclusion where investment portfolio business of spousal trust had been carried on directly by deceased husband 322

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

6 August 2019 External T.I. 2019-0792001E5 F - Tax on split income and excluded business

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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) no excluded amount where excluded business had ceased in prior year 268
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(d) - Subparagraph 120.4(1.1)(d)(iii) same-year limitation of the exclusion for income derived from the proceeds of an excluded business 223

7 June 2019 STEP Roundtable Q. 4, 2019-0799911C6 - TOSI & Meaning of Excluded Business

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business an excluded amount can exceed arm’s length remuneration for the services rendered 89

7 June 2019 STEP Roundtable Q. 3, 2019-0799901C6 - TOSI and Hours Worked

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business husband and wife each contributing 5 hours per week to business could have an excluded business 222

26 September 2018 External T.I. 2018-0770911E5 - Revised income sprinkling rules

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Business parental leave did not detract from satisfying activity level test 166

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)

Administrative Policy

7 June 2019 STEP Roundtable Q. 6, 2019-0799941C6 - TOSI tracing of attributes

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) - Subparagraph 120.4(1.1)(b)(ii) successive legatees can rely on the same activity-level of the original testator under s. 120.4(1.1)(b)(ii) 227

7 November 2018 External T.I. 2018-0777361E5 - TOSI and dividend income, including from a trust

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares an estate is a blocker for accessing the TOSI excluded share exemption 339

Articles

Subparagraph 120.4(1.1)(b)(ii)

Administrative Policy

7 June 2019 STEP Roundtable Q. 6, 2019-0799941C6 - TOSI tracing of attributes

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(b) a subsequent bequest of Opco shares from the active mother converts previous bequest of shares from the inactive father into good shares for TOSI purposes 199

Paragraph 120.4(1.1)(c)

Administrative Policy

Subparagraph 120.4(1.1)(c)(ii)

Administrative Policy

7 June 2019 STEP Roundtable Q. 5, 2019-0799961C6 - TOSI and Spouse Age 65+

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5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 4, 2018-0765811C6 F - Tax on Split Income

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Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (c) - Subparagraph (c)(ii) - Clause (c)(ii)(D) no TOSI on net rental income of spousal trust on properties managed by son if excluded amounts 181

5 October 2018 APFF Financial Strategies and Financial Instruments Roundtable Q. 3, 2018-0765801C6 F - 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) - Split Income - Paragraph (e) - Subparagraph (e)(ii) deemed s. 104(21) capital gains retained their character as stock market gains 177
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Related Business - Paragraph (a) - Subparagraph (a)(ii) related business if children manage investment business of trust whose interest income is distributed to mother 431

Paragraph 120.4(1.1)(d)

Administrative Policy

12 June 2019 External T.I. 2019-0792011E5 F - TOSI definition excluded shares

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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) two years were required to pass before proceeds from the sale of a related business could generate excluded share income for TOSI purposes 268

2 November 2018 External T.I. 2018-0771861E5 - TOSI: Second generation 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)(i) dividends generated from the investment of dividends received from a related business (or gains from such investments) are not themselves derived from that business 375

Subparagraph 120.4(1.1)(d)(iii)

Administrative Policy

6 August 2019 External T.I. 2019-0792001E5 F - Tax on split income and excluded business

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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) no excluded amount where excluded business had ceased in prior year 268
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) paid but non-worked days do not count 176

Articles

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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22 October 2012 External T.I. 2012-0432241E5 F - Impôt des enfants mineurs - gain en capital

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