Section 42

See Also

Bergeron v. The Queen, 2013 DTC 1081 [at 450], 2013 TCC 13

The taxpayer managed a the immigrant investor program at an investment dealer ("Cannacord") and was entitled to receive certain amounts from his...

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Fortino v. The Queen, 97 DTC 55, [1997] 2 CTC 2184 (TCC), briefly aff'd on procedural grounds 2000 DTC 6060 (FCA)

Lump sums received by individual vendors of shares for their execution of non-competition agreements with the share purchaser did not form part of...

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Words and Phrases
conditional obligation

Administrative Policy

19 January 2015 External T.I. 2013-0511381E5 F - Disposition subject to warranty

An estate pays pursuant to a claim made on a warranty clause in a real estate sale agreement made by the deceased. Can the estate claim a loss...

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26 November 2014 External T.I. 2014-0551641E5 F - Winding-up and subsection 42(1)

In accordance with IT-126R2, para. 5(b), a corporation is considered to have "been wound up" on the basis that it has been liquidated and the only...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) effective time of winding-up not delayed by potential litigation liability 104
Tax Topics - Income Tax Act - Section 88 - Subsection 88(2) corporation permitted to claim a s. 42(1)(b) loss after (per IT-126R2) it has been wound up 140

2 October 2014 External T.I. 2013-0513281E5 F - Interaction entre 42(1) et 39(1)c)

An individual after having sold shares of a small business corporation is required to pay $100,000 to the purchaser and incurs related legal...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) s. 42(1)(b)(ii) payments currently do not qualify as BILs 84

25 October 1994 External T.I. 9426485 - HAA 7781-4

When a taxpayer is disposing of the shares of a corporation as well as land and building held personally by him and used in the business of the...

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10 September 1991 T.I. (Tax Window, No. 11, p. 15, ¶1512)

S.42 applies to warranties implied or imposed by law.

Articles

Keith R. Hennel, "Escrow Arrangements in Acquisition Agreements: What Are You Creating?", CCH Tax Topics, No. 2176, November 21, 2013, p. 1, at 3

Where an amount of the purchase price is held back by the purchaser to satisfy warranties given by the vendor in relation to the sale of shares,...

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Richardson, "Purchase and Sale of a Business: Income Tax Aspects of Warranties, Price Adjustments, and Earn-Outs", 1990 Corporate Management Tax Conference Report, c. 10, pp. 10:3-10:7.

Subsection 42(1)

Paragraph 42(1)(b)

Administrative Policy

30 October 2008 External T.I. 2006-0198381E5 F - Disposition d'un BUP - application de l'article 42

In the year following the disposition of the taxpayer’s principal residence, the taxpayer paid an amount to the purchaser of the property...

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28 July 2015 External T.I. 2015-0585431E5 F - Frais juridiques

What is the treatment of legal expenses respecting a hidden defect in a rental property disposed of by the taxpayer? CRA responded:

[T]he legal...

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