Subsection 143.1(1) - Definitions
IC 78-5R3 "Communal Organizations"
25 August 1992 T.I. 921862 (April 1993 Access Letter, p. 148, ¶C117-185; Tax Window, No. 23, p. 21, ¶2146)
Athletes who have incorporated corporations to be the beneficiary of trusts established with national sports organizations will not be able to take advantage of s. 143.1.
Must an athlete, who was deemed to be a beneficiary of an amateur athlete trust which granted loans for the purchase of a home, include the loan amount in his income? CRA responded:
In general, a bona fide loan does not constitute payment or transfer. However, it is a matter of both fact and law as to whether, in a particular case, a bona fide loan was made by one individual to another. In this regard, for example, the Canada Revenue Agency would be of the view that if, at the time the loan is made by the trust, the athlete is unable to repay the loan and/or to provide reasonable security, the trust will be divested of property (funds) that could at that time be a payment or transfer of an amount within the meaning of paragraph 143.1(1.2)(d).
A world-class amateur athlete (the “Athlete”) deposits qualifying performance income (as defined in s. 143.1(1)) to an athlete trust (the "Trust"). Withdrawals were made from the Trust. What was their nature to the Athlete? CRA responded:
[S]ubsection 143.1(2) provides that amounts distributed in any year by the Trust to the Athlete are to be included in computing the Athlete’s income for the year. Amounts distributed by the Trust, as provided in paragraph 143.1(1.2)(d), include all amounts paid to or for the benefit of the Athlete … under the trust provisions. These amounts will be included in the Athlete's income, pursuant to section 12(1)(z), in respect of a business or property (in this case, it will be business income).
|Locations of other summaries||Wordcount|
|Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose||expenses of athlete with athlete trust||124|
|Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit||tests for source of business income for amateur athlete||149|