Administrative Policy
5 October 2018 APFF Roundtable Q. 4, 2018-0768891C6 F - Stock Dividend and Safe Income
The 100 common shares of Opco, having an aggregate fair market value (FMV) of $1,000,000 and an aggregate paid-up capital (PUC), and aggregate...
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| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.3) | different effect of stock dividend of high-low preferred shares paid to Holdco and trust shareholders |
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| Tax Topics - Income Tax Act - Section 52 - Subsection 52(3) - Paragraph 52(3)(a) | different effect of stock dividend of high-low preferred shares paid to trust and corporate shareholders | 397 |
21 November 2017 CTF Roundtable Q. 5, 2017-0726381C6 - 55(5)(f) and 55(2.3) with 55(2.1)
Opco pays a stock dividend to Holdco of shares with a paid-up capital of nil and a fair market value of $1,000 (and whose amount is deemed to be...
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| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) | notwithstanding dividend bifurcation under s. 55(5)(f) (or 55(2.3)), the s. 55(2.1)(b) purpose test is to be applied to the whole dividend | 238 |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(5) - Paragraph 55(5)(f) | bifurcated dividends are one dividend for s. 55(2.1)(b) purpose test but not under s. 55(2.1)(c) | 102 |
6 June 2017 External T.I. 2016-0658351E5 - Stock dividends and safe income
Opco has two resident shareholders (Holdco and Ms. X) each owning a bloc of 50 common shares with an adjusted cost base (“ACB”) of $5,000, a...
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| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) | safe income crystallized in basis when preferred share stock dividend paid | 269 |
Articles
Rick McLean, "Subsection 55(2): What Is the New Reality?", 2015 CTF Annual Conference paper
Potential application of s. 55(2) to stock dividend of high-low shares (pp. 22:63-64)
Holdco owns all of the shares (being common shares) of Opco...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) | 926 | |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Safe-Income Determination Time | 117 |
Paragraph 55(2.3)(a)
Articles
Doron Barkai, Alexander Demner, "Dealing with New Subsection 55(2): Issues and Strategies", 2016 Conference Report (Canadian Tax Foundation), 6:1–56
Failure of s. 55(2.3) to explicitly split the deemed dividend into 2 separate dividends (p. 6:12)
[P]aragraph 55(2.3)(a) deems the amount as...
Paragraph 55(2.3)(b)
Administrative Policy
12 December 2016 External T.I. 2016-0668341E5 F - Stock dividend
Prior to a sale by Holdco of its Class "A" voting and participating shares of Opco (which have a paid-up capital, adjusted cost base, safe income...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 52 - Subsection 52(3) - Paragraph 52(3)(a) - Subparagraph 52(3)(a)(ii) | stock dividend deemed under s. 55(2.3)(b) to come out of safe income gave rise to full basis | 189 |