Section 261

Table of Contents

Subsection 261(1) - Definitions

Canadian Tax Results

Administrative Policy

26 May 2016 IFA Roundtable Q. 3, 2016-0642111C6 - PUC of Shares of a FC Reporter

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 84 - Subsection 84(3) Canadian corporation with a USD functional currency can be subject to Part XIII withholding obligations on its USD prefs resulting from FX fluctuations 127

Elected Functional Currency

Administrative Policy

Functional Currency

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

28 November 2010 Annual CTF Roundtable, 2010-0385891C6 - Functional Currency Tax Reporting - CTF 2010

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Articles

Eric Bretsen, Heather Kerr, "Tax Planning for Foreign Currency", 2009 Conference Report (CTF), C. 35.

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Relevant Spot Rate

Administrative Policy

GST/HST Memorandum 3-6 Conversion of Foreign Currency July 2018

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 159 529

27 April 2017 Internal T.I. 2017-0684831I7 - Changes to relevant spot rate

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(7) must use Bank of Canada rate on conversion 102

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

10 October 2014 APFF Roundtable Q. 9, 2014-0538631C6 F - 2014 APFF Roundtable, Q. 9 - Currency conversions average foreign exchange rate

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Tax Reporting Currency

Administrative Policy

9 March 2016 Internal T.I. 2015-0612501I7 - ITA 261(21) anti-avoidance

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(20) - Paragraph 261(20)(b) s. 261(21) cannot apply to an FX hedging contract between a Canco which has the Canadian dollar as its functional currency and its parent which uses another currency 260

Subsection 261(2) - Canadian currency requirement

Cases

Ferlaino v. Canada, 2017 FCA 105

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a) exercise price of employee stock options should be translated at the exercise-date spot rate 181

Canada v. Agnico-Eagle Mines Limited, 2016 FCA 130

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 39 - Subsection 39(2) conversion of a U.S.-dollar convertible debenture resulted in no FX gain based on the appreciation in the underlying shares 323

Korfage v. The Queen, 2016 TCC 69 (Informal Procedure)

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 18 deduction for U.S. pension income deduction translated at exchange rate for year of receipt 138

See Also

Agnico-Eagle Mines Limited v. The Queen, 2015 DTC 1008 [at 43], 2014 TCC 324, aff'd 2016 FCA 130

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Other locations for this summary
Tax Topics - Income Tax Act - Section 39 - Subsection 39(2) U.S. dollar principal of a convertible debenture should be considered on conversion to have been settled at the historical exchange rate when the conversion price was set
Locations of other summaries Wordcount
Tax Topics - General Concepts - Evidence expert opinion on domestic law excluded 31

Ferlaino v. The Queen, 2016 TCC 105 (Informal Procedure)

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a) exercise price of employee stock options to be translated at the exercise-date spot rate 201
Tax Topics - Income Tax Act - 101-110 - Section 110 - Subsection 110(1.5) - Paragraph 110(1.5)(a) purpose of satisfying exe4rcise price test 249

Administrative Policy

S3-F4-C1 - General Discussion of Capital Cost Allowance

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense 476
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A 669
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property 170
Tax Topics - Income Tax Act - Section 16.1 - Subsection 16.1(1) 248
Tax Topics - Income Tax Act - Section 13 - Subsection 13(28) 194
Tax Topics - Income Tax Act - Section 13 - Subsection 13(27) 178
Tax Topics - Income Tax Act - Section 13 - Subsection 13(29) 145
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) 184
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2.2) 267
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(3) 60
Tax Topics - Income Tax Act - Section 18 - Subsection 18(3.1) 140
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.5) 167
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) - Paragraph 128.1(1)(b) 204
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) 150
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e) 55
Tax Topics - Income Tax Act - Section 43 - Subsection 43(1) 142
Tax Topics - Income Tax Act - Section 68 153
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(a) 65
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(b) 117
Tax Topics - Income Tax Act - Section 13 - Subsection 13(1) 403
Tax Topics - Income Tax Act - Section 8 - Subsection 8(2) 65
Tax Topics - Income Tax Act - Section 20 - Subsection 20(16.1) 142
Tax Topics - Income Tax Act - Section 13 - Subsection 13(9) 207
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) 299
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 214
Tax Topics - Income Tax Act - Section 13 - Subsection 13(5) 259
Tax Topics - Income Tax Act - Section 13 - Subsection 13(6) 191

20 November 2015 External T.I. 2014-0539951E5 - Foreign Currency Denominated Dividends

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 89 - Subsection 89(14) U.S.-dollar dividends translated at spot rate on payment date 41

24 November CTF Annual Roundtable, Q.10

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

9 October 2015 APFF Financial Strategies and Financial Instruments Roundtable Q. 5, 2015-0588981C6 F - Foreign currency stock market transactions

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

10 June 2014 Ministerial Correspondence 2014-0529961M4 - Capital gains on property in foreign currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

4 June 2014 External T.I. 2014-0517151E5 - S. 17.1 and debt denominated in foreign currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 17.1 - Subsection 17.1(1) prescribed interest on foreign currency PLOI translated at spot rate when loan made 186

14 January 2011 External T.I. 2004-0098601E5 - Foreign currency borrowings and ss 214(7) and (8).

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Bank of Canada Annual and Monthly Average Exchange Rates

Articles

Chris Van Loan, Peter Lee, "Agnico Eagle Mines Limited v. The Queen", International Tax, Wolters Kluwer CCH, No. 80, February 2015, p.1.

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Janette Y. Pantry, Soraya M. Jamal, "The Thin Cap Rules: Revisiting the Foreign Exchange Anomaly", Corporate Finance, 2011, p. 1934

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Patrick Marley, Amanda Heale, "New Foreign Currency Rules: Are They Functional?", International Tax, CCH, December 2007, No. 37, p. 7.

Paragraph 261(2)(b)

See Also

9189-7397 Québec Inc. v. Agence du revenu du Québec, 2018 QCCQ 4692

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(3) - Application of subsection (5)

Forms

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(5) - Functional currency tax reporting

Paragraph 261(5)(a)

Administrative Policy

2016 Ruling 2016-0629011R3 - PUC reinstatement under 212.3(9)

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(18) - Paragraph 212.3(18)(c) - Subparagraph 212.3(18)(c)(v) exclusion where (10)(f) corp on-subscribes proceeds in FA investments 168
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(9) - Paragraph 212.3(9)(b) - Subparagraph 212.3(9)(b)(ii) - Variable A - Clause (b) PUC restoration where borrowed money dividended up only to the level of a lower-tier CRIC, with cross-border PUC of both lower- and upper-tier CRICs computed both in Cdn$ and U.S.$ where lower-tier CRIC had U.S.$ EFC 599

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

11 July 2013 Internal T.I. 2012-0471111I7 - functional currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

20 September 2012 Internal T.I. 2012-0453071I7 - functional currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Articles

Geoffrey S. Turner, "New and Improved Functional Currency Proposals", International Tax, No. 43, December 2008, p. 1.

Subsection 261(6) - Partnerships

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

22 April 2013 External T.I. 2012-0471831E5 - Functional currency reporting for partnerships

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(6.1) - Foreign affiliates

Administrative Policy

26 April 2017 IFA Roundtable Q. 4, 2017-0691211C6 - App of s. 261(21) to loan with FA

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(20) application of s. 261(21) to deny a hedge of a U.S. dollar loan 158

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(7) - Converting Canadian currency amounts

Administrative Policy

27 April 2017 Internal T.I. 2017-0684831I7 - Changes to relevant spot rate

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(1) - Relevant Spot Rate consistent use of Bloomberg, Thomson Reuters or OANDA FX spot rates generally is acceptable 135

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Paragraph 261(7)(h)

Administrative Policy

2 March 2017 External T.I. 2016-0633981E5 - Retained Earnings and Functional Currency Election

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

20 September 2013 External T.I. 2012-0471261E5 - conversion of CDA into functional currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(8)

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(9)

Paragraph 261(9)(a)

Administrative Policy

7 October 2016 APFF Roundtable Q. 17, 2016-0652781C6 F - Functional currency and acquisition of control

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 111 - Subsection 111(4) - Paragraph 111(4)(e) FX gains or losses on pre-transition debts not affected 223
Tax Topics - Income Tax Act - Section 40 - Subsection 40(10) exclusion of pre-transition debts 147

Subsection 261(10)

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(11) - Determination of amounts payable

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Paragraph 261(11)(a)

Administrative Policy

21 January 2015 Internal T.I. 2014-0540631I7 - S.261 and loss carryback request

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 157 - Subsection 157(1) - Paragraph 157(1)(a) instalment method of a functional currency reporter after loss carryback 33

Subsection 261(12) - Application of subsections (7) and (8) to reversionary years

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

13 February 2013 External T.I. 2011-0430921E5 F - S. 261 - Loss carry-back & loss carry-forward

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(15) carryback of non-capital loss following revocation of functional currency election to functional currency year 91

Subsection 261(14)

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(15) - Amounts carried back

Administrative Policy

13 February 2013 External T.I. 2011-0430921E5 F - S. 261 - Loss carry-back & loss carry-forward

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(12) conversion to U.S. dollar and back again changed non-capital losses 99

Paragraph 261(15)(a)

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(16)

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(17)

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(18) - Anti-avoidance

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Articles

Eric Bretsen, Heather Kerr, "Tax Planning for Foreign Currency", 2009 Conference Report (CTF), C. 35.

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Subsection 261(20) - Application of subsection (21)

Administrative Policy

26 April 2017 IFA Roundtable Q. 4, 2017-0691211C6 - App of s. 261(21) to loan with FA

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(6.1) application of s. 261(21) to upstream USD loan to Cdn$ indirect parent 139

6 December 2011 TEI-CRA Liason Meeting Roundtable Q. 4, 2011-0426981C6 - Functional Currency Reporting

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Articles

Eric Bretsen, Heather Kerr, "Tax Planning for Foreign Currency", 2009 Conference Report (CTF), C. 35.

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Paragraph 261(20)(b)

Administrative Policy

9 March 2016 Internal T.I. 2015-0612501I7 - ITA 261(21) anti-avoidance

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 261 - Subsection 261(1) - Tax Reporting Currency non-resident parent would have Canadian dollar as tax reporting currency 78

Subsection 261(21) - Income, gain or loss determinations

Administrative Policy

S5-F4-C1 - Income Tax Reporting Currency

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

2015 Ruling 2014-0561001R3 - Functional currency election

The text of this content is paywalled Mon.-Fri. except for the 1st full week of each month. Subscribe or log in for unrestricted access.

Articles