Section 135

Subsection 135(1) - Deduction in computing income

Administrative Policy

19 November 2013 External T.I. 2011-0414201E5 F - Coop, ristournes, société de personne

A coop holds an interest in a limited partnership whose members also are members of the coop. For purposes of s. 135, are the customers of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) customers of LP rather than of members 176

22 July 2013 External T.I. 2012-0467231E5 - Patronage dividends and capital gains

Patronage dividends paid to members totalling the amount of taxable capital gains realized by a co-op will be deductible by the co-op pursuant to...

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20 September 2005 External T.I. 2005-0140601E5 F - Ristournes - Coop de travailleurs actionnaire

CRA indicated that a shareholder worker co-operative can make payments to its members that will be deductible under s. 135(1), stating:

In F

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19 June, 1995 T.I. 950842 (C.T.O. "Patronage of Dividends by Non Co-op"

"Private retailers who are not organized as co-operatives may deduct the amount of patronage dividends paid to customers. Such payment may be made...

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13 March 1992 External T.I. 5-920029

Payments made by a credit union to non-members which were similar in nature to allocations in proportions to borrowing and bonus interest payments...

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13 March 1992 T.I. (Tax Window, No. 18, p. 7, ¶1804)

A credit union can deduct payments made to non-members which, if made to members, will be deductible under s. 137(2) provided that the payments...

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Subsection 135(1.1)

Administrative Policy

25 October 2004 External T.I. 2004-0086261E5 F - Ristournes

After referring to the legislative proposal to add s. 135(1.1) applicable to payments made after March 22, 2004 and related changes to the...

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Subsection 135(2) - Limitation where non-member customer

Cases

The Queen v. Consumers' Co-Operative Refineries Ltd., 87 DTC 5409, [1987] 2 CTC 204 (FCA)

The taxpayer paid patronage dividends to its sole member in respect of refined products sold to it but no such payments were made to purchasers of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Amount allocation in proportion to patronage could be made at a zero rate 18
Tax Topics - Statutory Interpretation - Absurdities 49

Subsection 135(2.1)

Administrative Policy

25 February 2015 External T.I. 2013-0503941E5 F - Priority of subsections 135(2) or 135.1(3)

CRA addressed a numerical example where the cash dividends and patronage dividends paid as tax-deferred cooperative shares for the year were $6...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 135.1 - Subsection 135.1(3) non-deductible excess cannot be carried forward 127

Subsection 135(3)

Administrative Policy

29 April 2005 External T.I. 2005-0117371E5 F - Ristourne payée à une société de personnes

Regarding the withholding tax treatment of a payment made pursuant to an allocation in proportion to patronage (a "patronage dividend") to a...

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12 May 2004 External T.I. 2004-0072951E5 F - Ristournes versées dans un REÉR

Regarding a patronage payment made to an RRSP, CRA stated:

[W]here the person receiving the payment of a patronage dividend under section 135 is a...

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Subsection 135(4) - Definitions

Allocation in Proportion to Patronage

Administrative Policy

14 December 2012 External T.I. 2012-0436981E5 F - Ristournes de coopératives de travailleurs

S. 149.5 of the Quebec Cooperatives Act provides for the inclusion in a shareholding workers cooperative’s enhancement reserve of a portion of...

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6 October 2005 External T.I. 2005-0146061E5 F - Coop de travailleurs actionnaire - montants versés

After finding that a workers shareholder cooperative qualified as a cooperative corporation within the meaning of s. 136(2), CRA...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) interest on a preferred share was a dividend 27
Tax Topics - Income Tax Act - Section 136 - Subsection 136(2) workers shareholder cooperative qualified 108

19 January 2005 External T.I. 2004-0081001E5 F - Réserve de valorisation d'une coopérative

S. 149.1 of the Quebec Cooperatives Act provided that certain cooperatives could set up an “enhancement reserve” to value the use of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(b) enhancement reserve of Quebec cooperative added to capital 51

19 June 1995 Memorandum 950842 (C.T.O. "Patronage Dividends Paid by Non Co-ops")

"Although it is usually a co-operative that deducts patronage dividends, this deduction is available to any taxpayer who qualifies including sole...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Payment & Receipt 27

7 June 1993 T.I. (Tax Window, No. 31, p. 23, ¶2549)

The payment by a non-profit housing project for seniors of the excess of the selling price for units over the cost of construction would not...

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26 August 1992 T.I. (Tax Window, No. 23, p. 19, ¶2138)

A payor organization will not be considered to have failed to make "allocations in proportion to patronage" by virtue of members waiving their...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 135 - Subsection 135(7) 29

Customer

Administrative Policy

29 January 2018 External T.I. 2017-0702731E5 - Patronage dividends and partnerships

Can a cooperative corporation, that is a member of a limited partnership, deduct patronage dividends computed on the basis of sales made by the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) partnership rather than member was taxpayer for patronage dividend purposes 76

Income of the Taxpayer Attributable to Business Done With Members

Cases

Interprovincial Co-operative Ltd. v. The Queen, 87 DTC 5115, [1987] 1 CTC 222 (FCTD)

It was held that although suppliers shipped to, and billed, members of the co-operative directly, the members acted as agents of the co-operative...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Onus 62
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) property acquired only because parent so directed 92

Sedgewick Co-operative Association Ltd. v. The Queen, 83 DTC 5455, [1984] CTC 14 (FCTD)

Since the word "income" in s. 135(4)(d) (and s. 135(2)) is not preceded by the word "business", that "income" is to be calculated on the basis of...

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Administrative Policy

29 February 2016 External T.I. 2015-0613961E5 - Patronage dividends - partnership income

Is a cooperative corporation that is a limited partner required to include its share of partnership income in computing its income for s. 135(4)...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) flow-thrugh of LP income for s. 135 purposes 74

Subsection 135(7) - Payment to customer to be included in income

Administrative Policy

9 December 2010 External T.I. 2010-0364001E5 F - Ristourne de consommation, feuillet T4A

In finding that an amount received by virtue of an allocation in respect of "consumer goods or services" as defined in s. 135(4) is not required...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 218 T4A required where annual payments in proportion to patronage exceed $500 96

26 August 1992 T.I. (Tax Window, No. 23, p. 19, ¶2138)

A patronage dividend will not be included in the income of a co-operative member if the member unconditionally foregoes her present and future...

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