Section 53

Subsection 53(1) - Adjustments to cost base

Paragraph 53(1)(b)

Administrative Policy

16 November 2011 External T.I. 2011-0423861E5 F - paragraph 53(1)b)

Holdco, whose common shares of Opco have a nominal adjusted cost base ("ACB") and paid-up capital ("PUC"), a fair market value ("FMV") of $2...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(i) - Clause (a)(i)A) example of capital gain for CDA purposes being less than the s. 40 capital gain 511

Subparagraph 53(1)(b)(ii)

Administrative Policy

S3-F2-C1 - Capital Dividends

1.30 Where a deduction under subsection 112(1) is permitted on a dividend that results from an increase in paid-up capital, subparagraph...

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27 November 2018 CTF Roundtable Q. 2, 2018-0780071C6 - Impact of 55(2) deeming rules

CRA indicated that a dividend arising on a paid-up capital increase to which s. 55(2) applied remains a dividend for s. 53(1)(b)(i) purposes but...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 52 - Subsection 52(2) property dividended has cost equal to FMV where subject to s. 55(2) 104
Tax Topics - Income Tax Act - Section 52 - Subsection 52(3) cost under s. 52(3) for stock dividend amount to which s. 55(2) applied 69
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(i) 53(1)(b)(ii) and 52(3)(a) exclusion limited to where 55(2) did not apply to the stock dividend or PUC increase 70
Tax Topics - Income Tax Act - Section 112 - Subsection 112(3) - Paragraph 112(3)(b) - Subparagraph 112(3)(b)(i) stop-loss rule does not apply to the extent of the application of s. 55(2) 92

Articles

Rick McLean, Jeff Oldewening, Jonas Lau, "Capital Gains Stripping and Surplus Stripping", 2017 Annual CTF Conference draft paper

Potential double taxation if safe income crystallized by way of PUC bump (p. 20)

Consequently, for a safe income crystallization, where a PUC bump...

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Paragraph 53(1)(c)

See Also

Burman v. The Queen, 2003 DTC 1007 (TCC)

The failure of the taxpayer to draw salary from a company of which she was a shareholder did not represent a contribution of capital that could be...

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Administrative Policy

27 October 2017 Internal T.I. 2017-0694231I7 - Subsection 247(2), surplus, and FAPI

Where, as a result of an s. 247(2) transfer pricing adjustment respecting a transaction between Canco and CFA for the sale of goods or provision...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) s. 247(2) transfer pricing adjustment for sales undercharges to a CFA does not decrease the ES of the CFA 166
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(2) effect on surplus balances of foreign transfer-pricing adjustment might be reversed under Reg. 5907(2) 157
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Earnings - Paragraph (a) surplus could be adjusted by transfer-pricing adjustment 140

26 May 2016 IFA Roundtable Q. 6, 2016-0642081C6 - German Organschafts

Under an “Organschaft,” a German parent (“Parentco”) and its German subsidiary (“Subco”) can enter into an agreement under which Subco...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) profit transfer payments by German sub to its German parent deemed to be dividends under s. 90(2) 319
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(B) profit transfer payments made by a German sub to German parent are s. 90(2) dividends not within s. 95(2)(a)(ii)(B) after 2016 153
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) loss compensation payment under Organschaft 123

1 December 2009 Internal T.I. 2009-0324951I7 F - Prix de base rajusté des actions d'une société

The individuals Shareholders of the Corporation incur capital expenditures respecting its Building. In indicating that there generally was an...

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Words and Phrases
contribution of capital

16 May 2005 Internal T.I. 2005-0119061I7 F - Montant d'aide-actions

Regarding a subscription for shares of its subsidiary by M Co, the Directorate stated:

If M Co pays more for the shares than their fair market...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subpargraph 12(1)(x)(viii) funding of film production company by shares rather than loan would not give rise to assistance 181
Tax Topics - Income Tax Act - Section 125.4 - Subsection 125.4(1) - Assistance - Paragraph (a) conversion of loan that was taxable assistance into shares is not itself assistance] 192
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Excluded Obligation - Paragraph (a) conversion of loan that was taxable assistance under s. 12(1)(x) into shares with lower FMV would not give rise to forgiven amount 304
Tax Topics - Income Tax Regulations - Regulation 1106 - Subsection 1106(1) - Excluded Production - Paragraph (a) - Subparagraph (a)(iii) transfer of all the revenues to a film implies a transfer of its copyright 191
Tax Topics - General Concepts - Ownership transfer of the economic benefit of copyright entails transfer of its ownership 149

5 December 2003 External T.I. 2002-0165195 - Debt Forgiveness in Foreign Affiliates

Canco is a corporation resident in Canada that has subsidiaries in the US and the UK. Canco has a US subsidiary ("CFA1"), which has US dollar...

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14 July 1999 External T.I. 9917685 - FOREIGN AFFILIATE EARNINGS COMPUTATION

When FAl (wholly-owned by Canco) makes a capital contributes of depreciable capital property with a fair market value of $200, and a cost of $100,...

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92 C.R. - Q.28

Discussion of distinction between phrases "contribution of capital" and "contributed surplus"

The acquisition of par value shares at a price in...

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10 January 1992 CGA Roundtable, Q. 19, 7-912224

A corporation converts a debt owed to one of its shareholders, with whom it does not deal at arm’s length, to shares when the corporation is in...

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September 1991 Memorandum (Tax Window, No. 9, p. 7, ¶1444)

Where a corporation issues par value shares for cash in excess of their par value, the subscriber's ACB is computed by reference to the purchase...

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88 C.R. - Q.36 (p. 53:49)

[A] transaction that otherwise increase the capital of a corporation in respect of that increase may result in a contribution of capital for the...

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87 C.R. - Q.68 (p. 47:38)

To what extent would a contribution of capital to an insolvent corporation permit an increase in the cost of shares owned by the contributor under...

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IT-456R "Capital Property - Some Adjustments to Cost Base," para. 2

A contribution of capital occurs where a debt owing by a corporation to a shareholder is absolutely forgiven.

Articles

Tremblay, "Contributions to Capital - Cost Basis", Canadian Current Tax, October, 1987, p. 1

A court might decide that the fraction is not intended to result in an unfair denial of a portion of an eventual loss, and is merely intended to...

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Paragraph 53(1)(e)

Subparagraph 53(1)(e)(i)

Administrative Policy

10 May 2017 External T.I. 2017-0687051E5 F - Addition to ACB of a partnership interest

Is an amount included in a corporation’s income under s. 34.2(2) added by virtue of s. 53(1)(e) to the adjusted cost base of its partnership...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 34.2 - Subsection 34.2(2) no partnership-interest ACB addition for inclusion 57

2016 Ruling 2015-0617101R3 - 99(1) and timing of ACB adjustment

Background

LPco (a wholly-owned Canadian subsidiary of Parentco) acquired all the shares of GPco (holding all the Class “A” units of a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) on a s. 98(5) wind-up, the ACB of the transferor partner’s interest is bumped by YTD income 105
Tax Topics - Income Tax Act - Section 99 - Subsection 99(1) year ending with termination was final partnership year 116

10 October 2014 APFF Roundtable Q. 22, 2014-0538161C6 - APFF Conference, Q. 22 - ACB of interests in a partnership

X Inc. and Y Inc. each hold "tracking units" in a Quebec general partnership ("SENC AB") which, in turn, holds the units of two subsidiary LPs...

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1 October 2013 External T.I. 2013-0491571E5 - Partial disposition of partnership interest - ACB

Where a partner disposes of some of its units of a partnership during the year, is there an ACB adjustment for the entire amount of the income...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 43 - Subsection 43(1) disposition of some partnership units a part disposition 150

9 March 2012 External T.I. 2011-0416611E5 - disposition under paragraph 38(a.3)

Since s. 53(1)(e)(i)(A) does not explicitly say that the Act is to be read without reference to s. 38(a.3), there is no authority for adding...

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15 December 2010 External T.I. 2009-0349911E5 F - Calcul du PBR d'une participation dans une SEC

CRA affirmed its position as follows:

Income Tax Technical News No. 5 … states, in accordance with subparagraph 53(1)(e)(i), that in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.1) withdrawal equalling capital gain realized in year by LP triggered negative ACB gain to limited partner 205

15 July 2008 External T.I. 2008-0275471E5 F - Société de personnes/Ajustement au PBR

CRA indicated that until the amendment to s. 99(1) was passed, it intended to apply the law so that the income or loss of a partnership for its...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 99 - Subsection 99(1) CRA was prepared to rule to avoid double taxation problem prior to the s. 99(1) amendment 173

10 January 2008 External T.I. 2007-0227191E5 F - REVENUS D'UNE SOCIÉTÉ DE PERS. - PART PRIVILÉGIÉE

In connection with a query on the implications of holding a preferred unit in a partnership, i.e., a unit that confers on its holder a preferred...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1) common and preferred units can be used as a mechanism for profits to be allocated to each partner’s interest (a single property) 185

29 October 2002 External T.I. 2002-014633

When presented with a situation where a taxpayer retired from a partnership on September 30, 2001 and at December 31, 2001 had a residual interest...

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30 November 1997 Ruling 9803733 - TIMING OF ADJUSTMENTS TO PARTNERSHIP ACB.

Where a limited partner leaves the partnership before the year end, so that s. 98.1(1)(b) deems the retired partner not to have disposed of its...

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Income Tax Technical News, No. 9, 10 February 1997

In the Technical News No. 5, dated July 28, 1995, we mention that in computing the adjusted cost base (ACB) of a partner's partnership interest at...

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Income Tax Technical News, No. 5, 28 July 1995

For fiscal periods ending after 28 July 1995, the adjustments to the ACB of a partnership interest in respect of the income or loss of the...

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27 May 1994 External T.I. 9407285 - PARTNERSHIP - GENERAL

Where an investment partnership provides that a partner who redeems his units partway through the year for their current fair market value shall...

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7 June 1991 T.I. (Tax Window, No. 7, p. 9, ¶1366)

Where a partnership is wound-up under s. 98(5), the last fiscal period of the partnership will be considered to have ended immediately before the...

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11 March 1991 T.I. (Tax Window, No. 1, p. 5, ¶1155)

Where a corporation which has withdrawn from a partnership has the right to receive the amount in its capital account over time plus interest...

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18 April 1990 T.I. (September 1990 Access Letter, ¶1425)

Where B disposes of its partnership interest to the other partner, A, with the result that the partnership ceases to exist, B's share of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) 56

88 C.R. - Q.22

Where the accrued gain on the partnership assets is equal to the accrued gain on the partnership units, RC accepts that the gain which the...

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Articles

Margaret D. Paproski, "Partnership Interests and Negative ACB", Business Vehicles, Vol. VI, No. 3, p. 257.

Peter Lee, "Dissolution of Partnership - Calculation of Adjusted Cost Base of Partnership Interest", Business Vehicles, Vol. V, No. 4, 1999, p. 273.

Rinfret, "A Review of the AEC Pipelines Limited Partnership", 1997 Corporate Management Tax Conference Report, c. 7

Discussion of Revenue Canada's policy on timing of adjustments to ACB of partnership interests.

Subparagraph 53(1)(e)(iii)

Administrative Policy

9 March 1992 T.I. (Tax Window, No. 17, p. 3, ¶1789)

Re consequences where the partnership is the beneficiary of a life insurance policy in one of the three individual partners; or where the deceased...

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3 December 1991 T.I. (Tax Window, No. 15, p. 4, ¶1673)

Where all the partners of a partnership are corporations the partnership carries life insurance on the individuals who were the voting...

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16 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 8, ¶1052)

Where the partnership agreement provides for an income allocation to the retiring partner in the year of death equal to the life insurance...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1.1) 64

84 C.R. - Q.25

Where the partnership agreement provides that net life insurance proceeds will be allocable solely to the deceased partner and will be used to pay...

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Subparagraph 53(1)(e)(iv)

See Also

Mitchell v. R., [1996] 2 CTC 2659, 97 DTC 607

The guarantee by the partnership of various obligations of a limited partnership of which he was a member did not form part of the adjusted cost...

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Administrative Policy

27 June 2016 External T.I. 2016-0637341E5 F - Partnerships - Negative ACB

Rather than making current distributions of its cash flow to a limited partner, those sums are lent by the LP to the limited partner – then at...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 53 - Subsection 53(2) - Paragraph 53(2)(c) - Subparagraph 53(2)(c)(v) loan advances to a limited partner may give rise to immediate s. 53(2)(c)(v) grind 261
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.1) loans by LP to partner potentially gave rise to negative ACB gain 168
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.13) retention of partnership profits not a contribution 150

2016 Ruling 2016-0651621R3 - Partnership carried on by sole proprietor

A partnership was wound-up under s. 98(5) as a result of the limited partner transferring its interest under s. 85(1) to the general partner....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) the assumption by a partner of a debt owing to it by a partnership bumped the partner’s ACB 198
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount - Element B - Paragraph B(a) no forgiven amount where partner assumed debt owing to it by partnership 48

25 April 2013 Internal T.I. 2013-0478511I7 F - Distribution à un commanditaire

After addressing the usual case where a capital gains distribution by a limited partnership (“SEC”) would be respected as such for ITA...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate real estate capital gains flowed through to limited partner retained character 226
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) allocated capital gains retained their character unless re services performed by partner in course of separate business 397
Tax Topics - Excise Tax Act - Section 272.1 - Subsection 272.1(1) distinction between return on partnership investment and services rendered by partner in the course of a separate business 295

8 October 2010 Roundtable, 2010-0373371C6 F - Souscription des unités d'une SEC

The 100 units of a limited partnership (LP), which on an FMV basis has a deficit of $108,000 (i.e., liabilities of $110,000 and assets of $2,000),...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(a) subscription for units of an underwater LP represented an acquisition whose deemed cost was nil 217

3 October 2007 External T.I. 2007-0230671E5 F - Paragraphe 12 du IT-338R2

CRA confirmed that the following statement from IT-338R2, para. 12 continues to represent its position, notwithstanding the archiving of the...

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2000 Ruling 2000-0028423 - partnership dissolution under 98(3)

On a winding-up of a partnership, "for the purposes of determining the ACB to each Partner of that Partner's interest in the Partnership for the...

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2000 Ruling 2000-0028423 - partnership dissolution under 98(3)

In determining the ACB to a partner of its interest in a partnership for the purposes of s. 98(3), that ACB will be increased by liabilities of...

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29 June 2000 External T.I. 1999-0011495 - ACB Partnership Interest

Where a debt owing to a partner is converted into capital, the amount of such "contribution" and, therefore, the quantum of the resulting increase...

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4 June 1992 T.I. 920847 (December 1992 Access Letter, p. 34, ¶C245-044)

Where, in connection the dissolution of a partnership under s. 98(3) and the recontribution of the property to a new partnership under s. 97(2), a...

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89 C.R. - Q.35

Where one of the partners of a two-person partnership retires or dies, the continuing partner who has assumed the liabilities of the partnership...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) 26

89 C.M.TC - Q.8

where a limited partner has assumed partnership debt as part of the consideration given for the acquisition of his partnership interest, the debt...

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IT-338R "Partnership Interest - Effects on Adjusted Cost Base Resulting from the Admission or Retirement of a Partner"

Where on a dissolution of a partnership to which s. 98(5) applies the continuing partner has assumed the liabilities of the partnership, that...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) 10

IT-471R "Merger of Partnerships"

The ACB of each partner's interest in a partnership immediately before a distribution of undivided interest pursuant to s. 98(3) will include the...

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Subparagraph 53(1)(e)(viii)

Administrative Policy

Income Tax Technical News, No. 12 under "Adjusted Cost Base of Partnership Interest - Subparagraph 53(1)(e)(viii)

"Amounts referred in subparagraph 53(1)(e)(viii) will not increase the ACB of the partner's interest in the partnership until after the end of the...

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8 September 1997 External T.I. 9642025 - ACB OF PARTNERSHIP INTEREST - RESOURCE CONTEXT

In considering a situation where all the assets of a resource partnership are distributed on a pro-rata basis to the partners without an election...

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94 C.P.T.J. - Q. 4

Re whether there is a timely adjustment to the partners' ACB where there is a pro-rata distribution of resource properties of a partnership...

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Paragraph 53(1)(f.1)

Administrative Policy

31 March 2016 External T.I. 2014-0524391E5 F - Debt parking

A corporation disposes of debt of a subsidiary at a substantial loss to another corporation which is related to it (and the subsidiary) by virtue...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(8) debt parking rule can apply even if no capital loss is recognized 154

12 September 1990 T.I. (Tax Window, Prelim. No. 1, p. 10, ¶1016)

Where a non-interest-bearing debt is transferred at a loss between two corporations controlled by the same person, the loss will be added to the...

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16 February 1990 T.I. (July 1990 Access Letter, ¶1320)

Where a wholly-owned subsidiary transfer shares, which are capital property to it, at a loss to its parent which thereafter holds the shares as...

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2014 Ruling 2013-0514191R3 - Debt restructuring, forgiveness and winding-up

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Principal Amount non-application of s. 39(2) to exchange of U.S.-dollar notes 142
Tax Topics - Income Tax Act - Section 39 - Subsection 39(2) s. 51.1 exchange of U.S.-dollar notes 142
Tax Topics - Income Tax Act - Section 51.1 s. 51.1 exchange of U.S.-dollar notes 142
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(4) s. 51.1 exchange of U.S.-dollar notes and ATR-66 debt slide 430

Paragraph 53(1)(h)

Administrative Policy

3 May 2010 Internal T.I. 2010-0359631I7 F - Dépenses liées à une résidence non habitée

Following the death of their mother, two adult sisters inherited a property, for which expenses for property taxes, maintenance and insurance were...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base property taxes not added to ACB of inherited property before its sale 133

88 C.R. - Q.68

Where money borrowed to buy land cannot be related to particular parcels, the interest should generally be allocated to all land held during the...

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Paragraph 53(1)(j)

Administrative Policy

9 February 2010 Internal T.I. 2009-0333571I7 F - Paragraphe 7(1.5) - contrepartie reçue

Employees of a Canadian-controlled private corporation then exercised their options to acquire shares of their employer (Corporation A), and then...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.5) s. 7(1.5) rollover where employees exchanged specific s. 7(1.1) shares for shares of grandparent, even though they also received cash and PUC distribution 454
Tax Topics - Income Tax Act - Section 116 - Subsection 116(1) s. 116 certificate required even for shares disposed of under s. 7(1.5) rollover 283
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.4) non-resident ex-employees will be required to recognize s. 7 benefit deferred by s. 7(1.5) when they dispose of the shares acquired in exchange 148

Paragraph 53(1)(n)

Administrative Policy

7 October 2011 Roundtable, 2011-0411971C6 F - Appraisal Fees Deductibility

Before indicating that appraisal fees incurred for revaluing capital property, in order to prepare annual financial statements in accordance with...

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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 deductible appraisal fees to revalue fixed assets in accordance with IFRS 109

Subsection 53(2) - Amounts to be deducted

Paragraph 53(2)(b)

Administrative Policy

2003 Ruling 2002-0174703 - Foreign Affiliate Reorganization

A great-grandchild foreign subsidiary ("Dco") of a Canadian public corporation ("Aco") and a great-grandchild foreign subsidiary of Aco ("Fco")...

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Paragraph 53(2)(c)

Administrative Policy

27 March 2013 External T.I. 2012-0449661E5 F - Subparagraph 53(2)(c) ITA

In response to a query as to “the effect of the application of subsections 40(3.4) and 112(3.1) on the calculation of the adjusted cost base of...

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10 January 2005 External T.I. 2004-0075931E5 - adjusted cost base - partnership interest

An amount of foreign non-business income tax allocated by a partnership to a partner and deducted by the partner under s. 20(12) will not result...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) no partnership ACB reduction for partner s. 20(12) deduction 190

Subparagraph 53(2)(c)(i)

Administrative Policy

29 August 2007 Internal T.I. 2007-0219931I7 F - Perte sur taux de change - société de personnes

Canco and a US resident who each held a 50% interest in a US partnership each advanced US$1 million to the partnership and then converted those...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 39 - Subsection 39(2) s. 39(2) gain to partnership when USD advance owing by it is converted to units 90

Income Tax Technical News, No. 5, 28 July 1995

For fiscal periods ending after 28 July 1995, the adjustments to the ACB of a partnership interest in respect of the income or loss of the...

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Clause 53(2)(c)(i)(B)

Administrative Policy

13 January 2009 External T.I. 2008-0296981E5 F - Ajustement au PBR d'une participation

A taxpayer who invested $30,000 in a farming limited partnership was thereafter allocated farm losses for the partnership’s first two taxation...

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Subparagraph 53(2)(c)(v)

Cases

Tesainer v. Canada, 2009 DTC 5749, 2009 FCA 33

Damages received by the taxpayers who were limited partners of a former partnership ("Fenix") from lawyers, as a result of their claim (along with...

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Stursberg v. The Queen, 93 DTC 5271, [1993] 2 CTC 46, 93 DTC 5275, [1993] 2 CTC 76 (FCA)

The other partners of the partnership consented to a reduction in the taxpayer's partnership interest from 40% to 15%, and to an increase in the...

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Words and Phrases
distribution
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition partial disposition of partnership interest to a related corporation, even though proceeds run through the partnership 114

See Also

Tesainer v. The Queen, 2008 DTC 2807, 2008 TCC 101

Damages received by the taxpayer who, along with other partners of a real estate partnership, received damages from the law firm which had handled...

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Administrative Policy

27 June 2016 External T.I. 2016-0637341E5 F - Partnerships - Negative ACB

Rather than making current distributions of its cash flow to a limited partner, those sums are lent by the LP to the limited partner – then at...

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Words and Phrases
in lieu of on account of
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.1) loans by LP to partner potentially gave rise to negative ACB gain 168
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.13) retention of partnership profits not a contribution 150
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(iv) assumption of loan can be contribution, but not retained profits 177

20 August 2008 External T.I. 2008-0288561E5 F - Convention de partage d'une société de personnes

The partnership agreement for a services partnership provides that a partner who has withdrawn will be paid over five years an amount respecting...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1.1) no income could be allocated under s. 96(1.1) where aggregate income was nil 119
Tax Topics - Income Tax Act - 101-110 - Section 103 - Subsection 103(1) CRA generally does not challenge sharing agreements based on each partner’s contribution 56

11 April 1995 External T.I. 9508655 - PARTNERSHIP AT-RISK RULES RE LOAN

Prior to the enactment of ss.40(3.1) and (3.2), it had been agreed that excess revenues generated by a limited partnership would be distributed to...

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19 April 1990 T.I. (September 1990 Access Letter, ¶1414)

Where the Canadian partners of a U.S. partnership enter into currency feature contracts to close on the anticipated date of distribution of income...

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Paragraph 53(2)(h)

Articles

Goodman, "The Tax Treatment of Commercial Trusts", 1989 Canadian Tax Journal, July-August issue, p. 1053

Subparagraph 53(2)(h)(i.1)

Administrative Policy

2010 Ruling 2009-0330901R3 - Reorganization of XXXXXXXXXX

Background

Subco, which is held by Parent (also a Canadian corporation), owns all the units of Trust 1 which, in turn, holds all the units of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(2.1) recognition of capital loss on distribution of capital gain through redemption of most of trust units by corporate unitholder 100
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount - Element B - Paragraph B(a) no forgiven amount on transfer by unit trust to its parent of debt owing by parent 35

23 April 2009 External T.I. 2008-0301241E5 F - Fiducie d'invest. à participation unitaire-75(2)

Units of a unit trust (“UT”) that does not qualify as a mutual fund trust (“MFT”) are issued for FMV monetary consideration to arm’s...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) s. 75(2) generally not applied to commercial unit trust where single class of units subscribed for on FMV terms 277
Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) doubtful that s. 248(28)(a) can be applied to preclude ACB grind 181

4 November 2008 External T.I. 2008-0264181E5 - Income recognition and ACB - trust units

Where a corporation with an October 31 year end receives income distributions from an income trust in February and March 2007 and sells its units...

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Words and Phrases
included

2007 Ruling 2007-0245281R3 - windup of income trust on sale of assets:3rd party

This contemplated the winding-up of an income fund (the "Fund") following its acquisition by a "Bidco" in which the Fund sold its assets (mostly...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.3) capital loss on redemption of trust units following distribution of most of its assets including as capital gains distribution 110
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(21) trustees making filings on behalf of terminated fund 48
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) assumed debt traceable to capital distribution 97
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) realization and distribution of target MFT gain 101
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) 90
Tax Topics - Income Tax Act - Section 80 - Subsection 80(5) 90

2007 Ruling 2007-0237011R3 - XXXXXXXXXX - foreign buy-out of Canadian MFT

Beginning structure

The Fund, a listed mutual fund trust held units and debt of Trust, which held all the units (being B units) of a Canadian...

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19 January 2005 External T.I. 2004-0075601E5 F - Fiducie de fonds commun de placement

Where a mutual fund unitholder receives a cash distribution of interest income, a taxable capital gain and of the non-taxable portion of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(25.3) cost under s. 248(25.3) for distribution of ordinary income or capital gain made as units distribution 83

6 January 2005 External T.I. 2004-0087221E5 F - Modification de la déclaration d'une société

Where a corporation under-reported the capital gain on the disposition of mutual fund trust units because it did not receive T3 reporting of a...

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11 January 1996 External T.I. 9521525 - EFFECT OF NET CAPITAL LOSS ON ACB OF TRUST UNITS

Where an s. 104(13.2) designation is made in order that net capital losses of prior taxation years of a unit trust are used to shelter the taxable...

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Clause 53(2)(h)(i.1)(B)

Subclause 53(2)(h)(i.1)(B)(I)

Administrative Policy

7 November 2007 Internal T.I. 2007-0253861I7 F - Partie non-imposable du gain en capital

The TSO indicated that the taxpayer had increased that ACB of the taxpayer’s units by the non-taxable portion of capital gains realized on share...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 132.1 - Subsection 132.1(2) no ACB increase under s. 132.1(2) if no previous reduction under s. 53(2)(h)(i.1) 273

Paragraph 53(2)(k)

Administrative Policy

11 October 1991 T.I. (Tax Window, No. 11, p. 18, ¶1517)

Incentives under the Employee Share Ownership Act (Ontario) reduced the adjusted cost base of the shares purchased by the employee.

Subsection 53(2.1) - Election

Administrative Policy

19 January 2005 External T.I. 2004-0091601E5 F - Incitatif versé - taux d'intérêt réduit

In order to finance $400,000 of the $500,000 purchase price of a rental property, the taxpayer receives a 5-year mortgage loan from a financial...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) s. 12(2.2) election available to reduce mortgage interest, re cashback received from mortgage lender, to reduce extra interest incurred in two initial years 171
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subparagraph 12(1)(x)(v) s. 12(1)(x) applies (subject to s. 12(2.2) election) to lump-sum mortgage interest rebate except to the extent the amount was reported as s. 9 income 116

1993 A.P.F.F. Round Table, Q. 21

The election under s. 53(2.1) may not be made in respect of eligible capital property.

IT-273R2, "Government Assistance - General Comments," para. 12

Election should be made by means of a signed letter accompanying the return

12. The election is made by means of a signed letter accompanying the...

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