Subsection 143.4(1) - Definitions
Right to reduce
Administrative Policy
25 November 2021 CTF Roundtable Q. 6, 2021-0912011C6 - Application of section 143.4
2016-0628741I7 appeared to indicate that where, under a Plan of Arrangement, interest of a debtor will be forgiven, s. 143.4 will apply in the...
26 May 2016 Internal T.I. 2016-0628741I7 - Interaction of s. 80 and s. 143.4
The Taxpayer, which for a number of years had gone without paying interest on its Notes, had a Plan accepted in Year X and implemented in Year X+1...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(2) - Paragraph 80(2)(a) | no settlement of debt under Plan before conditions precedent fulfilled | 162 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) | interest only deductible in the year paid or payable | 163 |
| Tax Topics - Income Tax Act - Section 143.4 - Subsection 143.4(4) | s. 143.4(4) caused an immediate income inclusion of prior years’ interest that was to be forgiven at a later date under an approved Plan of Compromise | 185 |
Chris Falk, Stefanie Morand and Brian O'Neill, "Is there Always Certainty Regarding Tax Basis? – Limitations on Expenditures Pursuant to Sections 143.3 and 143.4," draft version of paper for CTF 2014 Conference Report.
Does automatic adjustment entail "exercise"? (p. 17)
The first part of the definition captures Collins-like scenarios. What is intended to be...
Subsection 143.4(2) - Limitation of amount of expenditure
Administrative Policy
2016 Ruling 2016-0661071R3 - Whether s. 80 or s. 143.4 applies
Under a CCAA Plan, unpaid interest of a corporation that had accrued in the current and prior years would be forgiven. Once the Plan was approved,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 143.4 - Subsection 143.4(4) | s. 80 rules prevailed in a CCAA compromise over the contingent amount (s. 143.4) rules | 320 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | presumption against double taxation applied to oust s. 143.4 | 58 |
S3-F6-C1 - Interest Deductibility
General paraphrase.
10 October 2014 APFF Roundtable Q. 15, 2014-0538151C6 F - 2014 APFF Roundtable, Q. 15 - Section 143.4 & Reverse Earn-out
A newly formed corporation ("Newco") purchases the shares of a target corporation ("Target") for consideration that includes an earn-out clause...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Excluded Obligation | reverse earnout obligation of Buyco re Target was excluded obligation | 458 |
Articles
Chris Falk, Stefanie Morand, Brian O'Neill, "Is there Always Certainty Regarding Tax Basis? – Limitations on Expenditures Pursuant to Sections 143.3 and 143.4", 2014 Conference Report, (Canadian Tax Foundation),14:1-36
No grind if up-front payment (p. 19)
Assume, for example that:
- Taxpayer A purchases capital property from Taxpayer B in exchange for $100,...
Subsection 143.4(4) - Subsequent years
Administrative Policy
2016 Ruling 2016-0661071R3 - Whether s. 80 or s. 143.4 applies
Pursuant to a Plan of Compromise and Arrangement under the CCAA (the “Plan”):
- A wholly-owned subsidiary of the taxpayer will be wound-up,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 143.4 - Subsection 143.4(2) | s. 80 prevailed over s. 143.4 | 110 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | presumption against double taxation applied to oust s. 143.4 | 58 |
26 May 2016 Internal T.I. 2016-0628741I7 - Interaction of s. 80 and s. 143.4
In Year 1 a Plan was approved which entailed a forgiveness of unpaid interest that had accrued in prior years. However, the Plan’s...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(2) - Paragraph 80(2)(a) | no settlement of debt under Plan before conditions precedent fulfilled | 162 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) | interest only deductible in the year paid or payable | 163 |
| Tax Topics - Income Tax Act - Section 143.4 - Subsection 143.4(1) - Right to reduce | right to reduce notwithstanding that conditions precedent to interest forgiveness not yet satisfied | 329 |
Articles
Chris Falk, Stefanie Morand, Brian O'Neill, "Is there Always Certainty Regarding Tax Basis? – Limitations on Expenditures Pursuant to Sections 143.3 and 143.4", 2014 Conference Report, (Canadian Tax Foundation),14:1-36
Harshness of s. 12(1)(x) inclusion (pp. 19-20)
[T]he consequences of the paragraph 12(l)(x) regime may seem especially harsh and problematic if...