Subsection 70(1) - Death of a taxpayer
Administrative Policy
21 August 1991 T.I. (Tax Window, No. 8, p. 10, ¶1404)
Interest on most compound debt instruments and term deposits accrues on a daily basis, with the result that on the holder's death, the accrued...
Subsection 70(2) - Amounts receivable
Cases
Crown Trust Co. v. Minister of National Revenue, 65 DTC 5176, [1965] CTC 295, [1965] S.C.R. 723
S.64(2) of the pre-1972 Act did not apply to pension benefits which were paid to the estate of the deceased because the amounts could only be...
Administrative Policy
May 2019 CPA Alberta CRA Roundtable, ITA Session – Q.20
Are all authorizations of representatives cancelled when a taxpayer dies? CRA responded:
Starting in May 2019, online authorizations for deceased...
9 March 2015 External T.I. 2012-0469761E5 F - Rights or things
A corporation wholly-owned by a discretionary non-testamentary trust (with an individual, his spouse and children as beneficiaries) declares a...
30 July 2012 External T.I. 2011-0421801E5 F - Choix aux paragraphes 70(2) et 70(3)
The taxpayer's share of partnership income from the beginning of the fiscal period to the date of death was included in the taxpayer’s terminal...
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Tax Topics - Income Tax Act - Section 70 - Subsection 70(3) | application of s. 70(3) re deceased’s share of partnership WIP is at estate’s choice | 258 |
23 March 2009 External T.I. 2008-0293131E5 F - Prestations reçues par une succession
An individual who had been receiving long-term disability benefits after an illness had prevented continuation of the individual’s employment,...
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Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(f) | amounts received by estate in settlement of deceased’s action for unpaid employment-termination disability were taxable | 130 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Death Benefit | survivor benefit in settlement of rights under a wage loss replacement plan could be a death benefit | 143 |
5 March 2009 External T.I. 2008-0279241E5 F - Prestation consécutive au décès
Before addressing the treatment of $5,000 paid by a union to an active member on the member’s death, CRA discussed the treatment of amounts paid...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Death Benefit | benefit paid on union member’s death could not be a death benefit (no employer-employee relationship | 30 |
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(j) | amount paid to union member could be treated as a refund of union dues with the balance taxable under s. 6(1)(j) | 106 |
7 April 2005 External T.I. 2004-0099191E5 F - Inventaire d'un artiste
After noting that the inventory of an artist that is valued at nil pursuant to s. 10(6) is a right or thing, CRA indicated that, subject to s....
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Tax Topics - Income Tax Act - Section 10 - Subsection 10(6) | reporting nil inventory on T2124 form is treated as making the election | 82 |
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | legatee generally acquires a deceased artist’s inventory on capital account | 26 |
16 September 2003 Internal T.I. 2003-0023957 F - Droits et biens crédit personne mariée
CCRA confirmed that income from rights or things, included in a separate return of a deceased spouse pursuant to s. 70(2), does not count towards...
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Tax Topics - Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(a) | income of deceased from rights or things (included in separate return) is excluded from income for s. 118(1)(a) purposes | 148 |
21 December 1995 External T.I. 9526035 - RIGHTS AND THINGS
A dividend declared by a corporation within a month following the end of its fiscal period that is payable 14 months after the end of that fiscal...
93 C.R. - Q. 38
An amount in a taxpayer's net income stabilization account fund no. 2 on hand at the time of her death will not be a right or a thing to which s....
9 January 1992 T.I. (Tax Window, No. 15, p. 23, ¶1690)
Old age security benefits which the estate is entitled to apply for and which would have been payable to the deceased had an application been made...
91 C.R. - Q.27
An enforceable claim to unpaid management bonus would constitute a "right or thing". However, where the employer had a contractual obligation to...
12 December 1989 Memorandum (May 1990 Access Letter, ¶1207)
An unexercised employee stock option held by an employee at the time of his death is not a "right or thing" because it is a right to purchase a...
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Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(c) | 74 |
18 October 89 Meeting with Quebec Accountants, Q.14 (April 90 Access Letter, ¶1166)
The entitlement of a deceased employee to receive amounts under a leave of absence program constitutes a right or thing for purposes of s. 70(2).
81 C.R. - Q.16
S.70(2) generally will be applicable to a funded deferred compensation arrangement, whereas it will not generally be applicable to a lump sum...
Articles
Thomas McCallum, "The Final Tax Return", CGA Magazine, January-February 2012, p.48
Non-technical discussion of opportunities for using separate return.
Innes, "If the Tax Treatment of Accrued Gains on Inventory at Death", Estates and Trust Journal, Vol. 12, 1992, p. 122.
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Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | 0 |
Subsection 70(3) - Rights or things transferred to beneficiaries
Cases
Tory Estate v. M.N.R., 73 DTC 5354, [1973] CTC 434 (FCA), briefly aff'd 76 DTC 6312, [1976] CTC 415 (SCC)
A non-resident beneficiary of the Tory Estate ("Mrs. Denton"), who was entitled to a cash legacy of $90,000, purchased accounts receivable of...
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Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) | 18 | |
Tax Topics - Statutory Interpretation - Noscitur a Sociis | 28 |
See Also
Agence du revenu du Québec v. Teitelbaum, 2019 QCCA 1408
The common-law partner of the taxpayer had not yet, at the time of his death, retired for purposes of the retirement compensation arrangement...
Teitelbaum v. Agence du revenu du Québec, 2017 QCCQ 8039, rev'd 2019 QCCA 1408
The plaintiff (“Teitelbaum”) received $1.4 million approximately two years after the death of her common-law partner (“Lewin”) as a result...
Administrative Policy
28 June 2017 External T.I. 2016-0653921E5 F - Beneficiary/person beneficially interested
Would s. 70(3) apply where the will bequeathed rights and things (here, artistic works which had been included in the deceased artist’s...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(25) | testamentary trust could be considered to have a right as beneficiary in estate | 122 |
30 July 2012 External T.I. 2011-0421801E5 F - Choix aux paragraphes 70(2) et 70(3)
The taxpayer's share of partnership income from the beginning of the fiscal period to the date of death was included in the taxpayer’s terminal...
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Tax Topics - Income Tax Act - Section 70 - Subsection 70(2) | if desire for s. 70(3) to apply, a timely revocation of s. 70(2) election can be made | 270 |
22 September 2011 External T.I. 2011-0394961E5 F - Droits ou biens
Where the value of the inventory of an artist’s business was deemed to be nil pursuant to s. 10(6), and s. 70(3) applied to the transfer of a...
8 November 2001 External T.I. 2001-0103375 F - Décès du rentier
On the death of a minor child who was either the beneficiary of an annuity described in s.60(l)(ii)(B) or the income beneficiary of a trust...
Subsection 70(5) - Capital property of a deceased taxpayer
Cases
Nussey v. Canada, 2001 DTC 5240, 2001 FCA 99
The two sons of the taxpayer had transferred to him shares of a family corporation. The shareholders agreement provided that, on the death of a...
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Tax Topics - General Concepts - Effective Date | agreed retroactive redemption date was ineffective | 81 |
Tax Topics - General Concepts - Mistake | 160 |
The Queen v. Mastronardi Estate, 77 DTC 5217, [1977] CTC 355 (FCA)
The taxpayer died suddenly and without warning of a heart attack. Shares that the deceased held in a company which held a term life insurance...
See Also
Bueti v. The Queen, 2015 DTC 1213 [at 1374], 2015 TCC 265
Mrs. Bueti, who was entitled to receive 1/3 of the residue of estate of her father (who died in August 1999), was found to have purchased, as...
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Tax Topics - General Concepts - Ownership | residuary beneficiary had no ownership of estate property | 118 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | residuary beneficiary did not acquire as a consequence of death | 135 |
Nauss v. The Queen, 2005 DTC 1370, 2005 TCC 488 (Informal Procedure)
In 1997 the taxpayer and his sister inherited from their grandmother a remainder interest in a house. with their 70-year old mother inheriting a...
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Tax Topics - General Concepts - Fair Market Value - Land | 152 |
Anderson Estate v. The Queen, 95 DTC 758 (TCC)
The sister-in-law of the deceased who had lived with him for more than 50 years and worked on his farm venture jointly with him for most of that...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 93 | |
Tax Topics - Income Tax Act - Section 54 - Disposition - Paragraph (e) | 93 |
Administrative Policy
15 June 2021 STEP Roundtable Q. 6, 2021-0883021C6 - Vested Indefeasibly
What happens on the death of a resident beneficiary holding a capital interest in a resident trust which has vested indefeasibly?
CRA indicated...
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Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Trust - Paragraph (g) | meaning of vested indefeasibly/ no particular T3 disclosure is required where all the interests in a trust have vested indefeasibly | 278 |
8 July 2020 CALU Roundtable Q. 7, 2020-0842251C6 - Valuation of private company shares
At the 2009 British Columbia tax conference the CRA stated:
"...non-participating controlling shares have some value and may therefore bear a...
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Tax Topics - General Concepts - Fair Market Value - Other | special voting shares generally are not accorded value | 117 |
29 May 2018 STEP Roundtable Q. 8, 2018-0742141C6 - Application of subsection 70(5)
In the course of dealing with a secondary issue, McKenzie stated that s. 70(5) does not apply to a non-resident person. CRA stated that this has...
6 October 2017 APFF Financial Strategies and Instruments Roundtable Q. 8, 2017-0712621C6 F - Dépôt en monnaie étrangère-Immobilisation
S. 39(1.1) would not apply to a sum of money in foreign currency held on deposit by an individual at a financial institution. Instead the...
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Tax Topics - Income Tax Act - Section 39 - Subsection 39(1.1) | non-application to FX deposits | 187 |
10 June 2016 STEP Roundtable Q. 10, 2016-0645781C6 - US Revocable Living Trusts
CRA indicated that a (U.S.) revocable living trust is a true trust and not a bare trust given that it has remainder beneficiaries. CRA then was...
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Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) | U.S. revocable living trust is not a bare trust | 171 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | remainder beneficary of inter vivos trust | 165 |
12 December 2014 External T.I. 2013-0511391E5 F - Deemed disposition of capital interest in personal trust
The sole beneficiary of an inter vivos trust (the "Trust"), whose interest under the Trust had vested indefeasibly, died, as a result of which his...
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Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(2) | full step-up of properties distributed in satisfaction of an estate's capital interest in an inter vivos personal trust | 340 |
24 May 2012 External T.I. 2011-0429991E5 - Price Adjustment Clause
Mr. A engages in an estate freeze transaction in Year 1 in which all his common shares are exchanged in a s. 86 reorganization for preferred...
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Tax Topics - General Concepts - Effective Date | 157 |
28 November 2010 CTF Roundtable, 2013-0487431C6 - Value of Vote-Only Shares 2010 CTF Conference
The questioner referenced the CRA statement at the 2009 British Columbia Tax Conference that, in the context of an estate freeze of a...
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Tax Topics - General Concepts - Fair Market Value - Shares | premium for voting rights | 170 |
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(4) - Paragraph 104(4)(a) | 95 |
2 February 2006 External T.I. 2005-0111911E5 F - Participation indivise dans un immeuble-fiducie
At the time of Mr. X's death, the usufruct of all the property held by Mr. X, including his undivided share in a two-unit Immovable, devolved to...
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Tax Topics - Income Tax Act - Section 54 - Principal Residence - Paragraph (c.1) | grant under will of usufruct in 2-unit property to surviving spouse constituted a disposition to a testamentary trust which could make the (c.1) designation for the home unit | 183 |
7 October 2005 Roundtable, 2005-0138111C6 F - Actions donnant droit au produit d'assurance-vie
The taxpayer wants the proceeds of the universal life insurance policy on his life paid on his death to his adult child, rather than to his...
7 October 2005 Roundtable, 2005-0138361C6 F - Actions d'assurance vie
The shareholder of a wholly-owned corporation acquires for $1 a special share that is redeemable for $1 at the discretion of the corporation and...
21 January 2003 External T.I. 2001-0109445 F - Usufruit-droit privé français-nu-prop. Cdn.
At the time of the death in 1985 of the taxpayer’s father, the usufruct under French law of a rental property located in France vested in the...
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Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | bare owner of rental property not entitled to claim CCA | 91 |
4 October 2002 External T.I. 2002-0154725 - LIFE INTEREST-REMAINDER INTEREST
On the death of Mrs. X, a life interest in a residence was received by her surviving husband (Mr. X) and the remainder interest by her daughter...
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Tax Topics - General Concepts - Fair Market Value - Other | 140 |
11 February 2002 External T.I. 2000-0004416
Where a Canadian resident individual inherits the shares of a publicly-traded company from a foreign relative, those shares will have a nil cost...
May 1999 CALU Conference No. 9908430 Q. 8
Where a shareholder holds a special share (in addition to common shares of the corporation) with a nominal redemption value, and the shareholders...
3 March 1995 External T.I. 9429915 - TRANSFER ON DEATH OF JOINTLY-OWNED PROPERTY
The taxpayer's representative argued that because each joint tenant has an interest in the whole of the property, when the first joint tenant dies...
29 July 1992 External T.I. 5-921406
Where a taxpayer died in the Province of Quebec before 1989 in possession of property subject to a usufruct, s. 70(5)(c) would apply to the person...
90 C.R. - Q54
The ratio in s. 70(5)(b) which applies for determining a beneficiary's deemed cost of each depreciable asset in a class also is the ratio which...
88 C.R. - Q49
Neither s. 69 nor s. 70(5) applies to an accrual basis taxpayer when under the terms of his will a non-capital asset is transferred upon his death.
86 C.R. - Q56
A beneficiary to whom a mortgage receivable with a value less than its principal amount is distributed by the executors will realize a capital...
IC 89-3 "Policy Statement on Business Equity Valuations"
Discussion of the circumstances in which a buy-sell agreement will be considered determinative of value for purposes of s. 70(5).
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Tax Topics - General Concepts - Fair Market Value - Shares | 45 |
Articles
Brian Nichols, "Double Taxation 101", Tax Topics, No. 1570, 11 April 2002, p. 1
Comparison of Pipeline Strategy With S.164(6) Strategy.
Cadesky, "Succession of the Family Business", Estates and Trusts Journal, 1994, Volume 13, p. 219.
Subsection 70(5.1)
Administrative Policy
6 December 2011 External T.I. 2010-0384701E5 F - Décès contribuable - Immobilisation admissible
Mr. X bequeathed all his property to his children including goodwill that he had generated over the years from his business, which his estate then...
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Tax Topics - General Concepts - Effective Date | CRA policy of price adjustment clauses inapplicable where deferred sale price subsequently adjusted | 253 |
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2) | CRA policy for adjusting a statute-barred year for a reduction in the 5th year of staged-proceeds sale | 147 |
Subsection 70(5.2) - Resource property and land inventory
Administrative Policy
22 June 2020 External T.I. 2017-0728051E5 F - Land inventory
Does "land" in s. 70(5.2) include not only vacant land but also land on which other real property is erected, such as houses for sale or condo...
20 June 2014 External T.I. 2014-0532221E5 - Disposition of Canadian resource property
As a result of a lease of subsurface rights to an oil company, Mr. A received monthly royalty payments (the "Royalty Payments"), which continued...
7 February 2005 External T.I. 2005-0111431E5 F - Death of a Taxpayer - Deduction of CCDE
By virtue of being a member of a partnership (SENC), Mr. X was allocated his share of Canadian development expense (CDE) incurred by a corporation...
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Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(2) | CCDE balance cannot be deducted in terminal return or by estate | 97 |
Subsection 70(5.3) - Fair market value
Administrative Policy
17 February 2022 External T.I. 2021-0882401E5 - Immigration and foreign life insurance policy
A non-resident individual, upon becoming resident in Canada, owned shares of a non-resident corporation (Foreignco A) which was the policyholder...
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Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) - Paragraph 128.1(1)(c) | s. 70(5.3) applied to valuation of shares of corp holding a foreign policy | 160 |
19 May 2021 CLHIA Roundtable Q. 5, 2021-0884301C6 - 2021 CLHIA Roundtable - Q5 - Life insurance shares
A shareholder wants the proceeds of an insurance policy on his life, held by a corporation of which he is the sole shareholder (holding all the...
19 May 2021 CLHIA Roundtable Q. 4, 2021-0884291C6 - 2021 CLHIA Roundtable - Q4 - Life insurance shares
The taxpayer wants the proceeds of the universal life insurance policy on his life paid on his death to his adult child, rather than to his...
8 July 2020 CALU Roundtable Q. 5, 2020-0842191C6 - Jointly owned policies - 70(5.3)
Opco and A (its sole shareholder) jointly acquired a universal life insurance policy on the life of A, whose stipulated death benefit equals $1...
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Tax Topics - General Concepts - Fair Market Value - Other | valuation of co-owned whole life policy | 127 |
6 October 2006 Roundtable, 2006-0197111C6 F - Le paragraphe 70(5.3) de la Loi.
Mr. A owns all the issued and outstanding shares of Corporation 1 and Corporation 2 (making them sister corporations). Corporation 1 has a...
10 October 2003 Roundtable, 2003-0035675 F - EVALUATION D'UNE POLICE D'ASSURANCE-VIE
A corporation holding a life insurance policy on the life of a shareholder receives a policy loan in an amount equal to the full cash surrender...
4 April 2002 External T.I. 2001-0103735 F - Fiducie exclusive au conjoint et ass.-vie
A spousal trust for the widow (Ms. A) of Mr. A held shares of Opco which, in turn, was the owner and beneficiary of a policy that became payable...
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Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(g) | s. 110.6(14)(g) inapplicable to shares held by spousal trust on the spouse’s death | 90 |
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(15) - Paragraph 110.6(15)(a) | the spouse beneficiary of a Quebec spousal trust owns the shares owned by that trust | 199 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) - Paragraph 248(3)(e) | s. 248(3)(e) deems the spouse beneficiary of a Quebec spousal trust to own shares of that trust | 215 |
20 September 1993 Income Tax Severed Letter 9321275 - Life Annuities
Although a life annuity is a life insurance policy which is issued or effected upon the life of a person, it is not a policy under which the life...
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Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account | 66 |
84 C.R. - Q.54
S.70(5.3) is not applicable on a sale of shares to a non-arm's length person, and the proceeds of the life insurance policy will be a factor in...
Subsection 70(6) - Where transfer or distribution to spouse or spouse trust
Cases
Picard v. Lagotte Succession, 2017 QCCS 330 (Quebec Superior Court)
A surviving spouse (Picard – who was not one of the residuary beneficiaries of the estate of his wife) argued that it was improper for the...
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Tax Topics - Income Tax Act - Section 70 - Subsection 70(6.2) | executor was authorized under will to choose not to elect | 595 |
Greenwood Estate v. The Queen, 94 DTC 6190, [1994] 1 CTC 310 (FCA)
The deceased taxpayer agreed to sell shares to his three sons for $800,000, payable by a promissory note, with such sale to be completed within 30...
Van Son Estate v. The Queen, 90 DTC 6183, [1990] 1 CTC 182 (FCTD)
The deceased taxpayer bequeath his 49% shareholding in a private company to his surviving wife. Joyal J. found that under a buy-sell agreement of...
Hillis v. The Queen, 83 DTC 5365, [1983] CTC 348 (FCA)
Per Clement, D.J.: Only the property of the intestate taxpayer's estate to which his widow was entitled pursuant to the Intestate Succession Act...
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Tax Topics - Statutory Interpretation - Resolving Ambiguity | 58 |
Katz Estate v. The Queen, 76 DTC 6377, [1976] CTC 633 (FCTD)
Since the deceased is deemed to have disposed of depreciable assets immediately before the time of his death, his representatives are precluded...
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Tax Topics - Income Tax Act - Section 249 - Subsection 249(1) | 50 |
See Also
Husel Estate v. The Queen, 94 DTC 1765, [1995] 1 CTC 2298 (TCC)
A transfer of shares to the wife of the deceased in consideration for cash and set-off of debts owing to her by the estate occurred pursuant to a...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | 83 |
May Estate v. MNR, 89 DTC 534, [1989] 2 CTC 2305 (TCC)
Following litigation in the Saskatchewan Surrogate Court, an order was made vesting in the deceased's widow nine one-quarter parcels of land....
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Tax Topics - General Concepts - Effective Date | 23 |
The Queen v. Green Estate, 78 DTC 6324, [1978] CTC 501 (FCTD)
The testatrix provided in her will that the residue should be divided among her children then alive when there should no longer be any child of...
Estate of the Late Gordon Clark Terrill v. Minister of National Revenue, [1987] 2 CTC 2216, 87 DTC 504
The will of the deceased bequeathed all of his property in trust for the exclusive benefit of his wife during her lifetime subject to the effect...
Administrative Policy
20 June 2023 STEP Roundtable Q. 14, 2023-0967371C6 - s.70(6) & Application to Extend
What is the process for making a written request to extend the 36-month period under s. 70(6) for the property of the deceased to vest...
29 May 2018 STEP Roundtable Q. 4, 2018-0743951C6 - Safe income and estate
CRA considers that there is no flow-through to the estate and beneficiaries of safe income attributable to shares where they were deemed to have...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) | safe income flow through on a s. 70(6), but not s. 70(5), transfer | 111 |
13 June 2017 STEP Roundtable Q. 11, 2017-0693331C6 - Substituted property of estate
The will of the deceased specifies that specified shares are to be transferred to a spousal trust. While the estate assets are being administered,...
9 October 2015 APFF Financial Strategies and Instruments Roundtable Q. 9, 2015-0596611C6 F - Transfer 70(6)
An executor of an estate, whose residue was bequeathed to a spousal trust, paid the estate debts with liquid assets, transferred 75% of the...
16 June 2014 STEP Roundtable, 2014-0523091C6 - STEP CRA Roundtable June 2014
Can s. 70(6) apply to a transfer by a taxpayer both to his or her spouse and a transfer to his or her common law spouse? CRA stated:
…It is...
11 January 2012 STEP Roundtable, 2011-0402291C6 - Subsection 248(8)-Intestacy-Transfer of Property
Where a taxpayer dies intestate, then provided the property of the deceased is distributed to the beneficiaries in accordance with the shares...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | 108 | |
Tax Topics - Income Tax Act - Section 60 - Paragraph 60(l) | 108 |
12 March 2012 External T.I. 2010-0378451E5 - Vested Indefeasibly
Para. 8 of IT-449R (archived) re the effect of a buy-sell agreement on the "indefeasibly vested" requirement is still supportable.
8 October 2010 Roundtable, 2010-0371911C6 F - Biens dévolus au conjoint
In a situation where, in order to pay debts of the deceased, the executors of an estate sold a portion of the shares which were bequeathed to the...
30 January 2009 External T.I. 2008-0287541E5 F - Décès - actions détenues en indivision
On the death of Y, his co-ownership interest in shares held with his spouse (X) passed to a spousal trust for her following the settling of the...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(21) | block of shares is not a single property, so that partition must occur on a share-by-share basis giving rise to separately-held fractional shares | 277 |
17 December 1996 Internal T.I. 9625727 - REMARRIAGE CLAUSE & DEF'N OF SPOUSAL TRUST
Where a will provided that the widow was entitled to receive the income of the estate but that her entitlement was "to be terminated upon her...
9 May 2007 External T.I. 2006-0189931E5 F - Renonciation à une fiducie par un conjoint
The beneficiary of a testamentary spousal trust renounces all entitlements under the trust (other than income that has accrued to date) without...
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Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | renunciation of interest in spousal trust not a disposition to the family beneficiaries | 84 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | extinguishment of trust interests on their renunciation is a disposition of the renounced interest, but resulting variation of trust to accelerate distribution entitlements is not | 167 |
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(4) - Paragraph 104(4)(a) | variation of spousal trust, following renunciation by spouse, to accelerate distribution entitlement of residuary beneficiaries would not engage s. 104(4) until distribution | 195 |
27 January 2004 External T.I. 2003-0006025 F - Roulement d'une partie d'un bien
Where part of an immovable was distributed to the spouse of the deceased, and the other interests in the immovable were distributed to children of...
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | s. 70(6) can apply to a part interest in a single real property | 41 |
14 November 1996 External T.I. 9627345 - LENDING POWERS IN A SPOUSAL TRUST
Before referring to Peardon v. MNR, 86 DTC 1045, RC in its summary stated that "lending or investment of trust property to a non-spouse on...
5 May 1995 External T.I. 9500985 - ASSUMPTION OF LIABILITIES
A transfer of shares of a private corporation made to the surviving spouse after her agreement to assume liabilities of the estate and provide...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | 63 |
17 August 1994 External T.I. 9410535 - TRUSTS - "AS A CONSEQUENCE OF THE TAXPAYER'S DEATH"
A discretion accorded by the will to the executors to determine the particular assets to be distributed to the spouse or spousal trust of the...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | 41 |
30 November 1993 Income Tax Severed Letter 9327165 - Vested Indefeasibly
In determining whether a by-sell agreement in a shareholders' agreement would result in shares not be considered to vest indefeasibly in the...
22 November 1991 T.I. (Tax Window, No. 13, p. 7, ¶1632)
A designation under s. 104(13.1) or (13.2) will not affect the status of a spousal trust.
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(4) | 16 |
22 August 1991 T.I. (Tax Window, No. 8, p. 19, ¶1406)
The spouse is entitled to receive all of the income of the trust only if the sole discretion to receive all or part of the income is in the...
15 April 1991 T.I. (Tax Window, No. 2, p. 23, ¶1202)
Where a bequest to a surviving spouse is made in addition to the surviving spouse's entitlement under the Family Law Act (Ontario), two valid...
3 December 1990 Memorandum (Tax Window, Prelim. No. 2, p. 15, ¶1077)
An apartment building and the underlying land generally can be treated as two separate properties, with the result that s. 70(5) can be applied to...
14 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 10, ¶1042)
Where a deceased taxpayer's surviving spouse receives property from the estate pursuant to his or her equalization right, the property will be...
14 May 1990 T.I. (October 1990 Access Letter, ¶1466)
Where the surviving spouse has the right to put the shares of the deceased to the other shareholders, and the other shareholders have a call...
2 April 1990 T.I. (September 1990 Access Letter, ¶1420)
A clause in a will empowering the executors determine whether a particular receipt was on income or capital account serves only to facilitate the...
19 April 1990 T.I. (July 1990 Access Letter, ¶1324)
After reconsidering its technical interpretation of 7 December 1989, RC was of the view that a designation under s. 104(13.1) or (13.2) and the...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust | 74 |
7 December 1989 T.I. (May 1990 Access Letter, ¶1225)
Where a trust pays the tax liability out of trust income resulting from an s. 104(13.1) designation, the requirements of s. 70(6)(b)(i) will not...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13.1) | 33 | |
Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust | 58 |
3 November 89 T.I. (April 90 Access Letter, ¶1173)
A spousal trust will be created where the will directs the establishment of a trust for a spouse that leaves total discretion to the executor to...
84 C.R. - Q.29
Re usufructs.
80 C.R. - Q.42
If at the time a widow acquires shares under her husband's will, she is bound under a buy-sell agreement to sell them, there is no indefeasible...
IT-449R "Meaning of 'Vested Indefeasibly'"
Indefeasible vesting where rights held in trust for multiple beneficiaries
1. ... Where property is held in trust for the benefit of one or more...
IT-305R3 "Establishment of Testamentary Spouse Trust"
Locations of other summaries | Wordcount | |
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Tax Topics - General Concepts - Payment & Receipt | 32 |
Articles
Elie Roth, Tim Youdan, Chris Anderson, Kim Brown, "Taxation of Trusts Resident in Canada", Chapter 3 of Canadian Taxation of Trusts, (Canadian Tax Foundation), 2016.
Treaty relief from residency requirement in 70(6) – but “will” requirement (p. 171)
Subsection 70(6) applies to a transfer to a taxpayers...
Paragraph 70(6)(a)
Administrative Policy
30 September 2010 Internal T.I. 2010-0373901I7 F - Bigamie fiscale - transfert de biens au décès
The taxpayer lived with his spouse in Immovables A, but thereafter commenced to live separate and apart from her, but did not divorce from her,...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 40 - Subsection 40(4) - Paragraph 40(4)(b) - Subparagraph 40(4)(b)(i) | application of s. 40(4)(b)(i) by both surviving spouse re House A and surviving common-law partner re House B – but not for overlapping years | 244 |
Paragraph 70(6)(b)
Administrative Policy
Folio S6-F4-C1, "Testamentary Spouse or Common-law Partner Trusts," 3 February 2022
1.2-1.3 Indefeasible vesting requirement. The capital property distributed to the spouse trust etc. must vest indefeasibly in it within 36 months...
20 April 2016 External T.I. 2015-0601141E5 - Delay in final distribution from spousal trust
Would a testamentary trust qualify as a spousal trust if the deceased taxpayer’s will deferred the final distribution date for the spousal trust...
18 April 2005 External T.I. 2004-0093821E5 F - Fiducie créée par testament
Under a mooted spouse trust, the spouse has the exclusive and unconditional right to all annual income but it remains in the spouse's discretion...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust - Paragraph (c) - Subparagraph (c)(i) | beneficiary electing not to receive income before it becomes payable does not taint the trust (cf. renouncing income already payable) | 288 |
13 August 2002 External T.I. 2002-0143255 F - Par. 70(6)(b)
Mr. X's will provided a testamentary trust for Ms. X, who was entitled to all the income, with their children as the capital beneficiaries on her...
Articles
Elie Roth, Tim Youdan, Chris Anderson, Kim Brown, "Classification of Trusts for Income Tax Purposes", Chapter 2 of Canadian Taxation of Trusts (Canadian Tax Foundation), 2016.
Right of spouse to enforce payment of income (pp. 90-1)
It seems that the spouse or common-law partner must each year be able to enforce payment...
Subparagraph 70(6)(b)(ii)
Administrative Policy
7 October 2022 APFF Roundtable Q. 6, 2022-0942141C6 F - Rollover under 70(6) and gifts to charities
Mrs. X's late husband created a testamentary spousal trust. Considering that charitable donations have always been part of Mrs. X's cost of...
7 October 2020 APFF Roundtable Q. 5, 2020-0852171C6 F - Usufruct of a principal residence
A housing unit is subject to a usufruct created by the Quebec will of Mr. X, with Mr. X’s surviving spouse (Ms. X) being the usufructuary, and...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 54 - Principal Residence - Paragraph (c.1) | a deemed s. 248(3) testamentary usufruct trust might access the principal residence exemption on the spousal usufructuary’s death or on her surrendering her interest | 409 |
Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(4) | application of s. 107(4) to termination of deemed s. 248(3)(a) spousal trust | 472 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) | application of s. 248(3) to usufruct created by will and terminated by death of usufructuary or surrender by her, or assignment or death by bare owner | 286 |
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 7, 2018-0761511C6 F - Rollover to spousal trust on death
The decedent bequeathed, to a spousal trust, insurance policies (for which he had been the policyholder and beneficiary) on the lives of his...
20 April 2017 External T.I. 2016-0672501E5 F - Usufruct and Use of capital of a trust by a spouse
The will of the Quebec deceased bequeathed the usufruct of rental property (the "Immovable") to his spouse and the bare ownership to his adult...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) - Paragraph 248(3)(a) | deemed spousal trust created through will | 121 |
5 October 2012 Roundtable, 2012-0453121C6 F - Fiducie au conjoint-police d'assurance-vie
testamentary trust, with a policy endorsement for the suspension of the payment of premiums throughout its holding by a spousal trust would not in...
Paragraph 70(6)(d)
Administrative Policy
15 September 2004 Internal T.I. 2004-0075001I7 F - Transfert de bien lors du décès d'un conjoint
In 1994, when the capital cost of a taxpayer’s building was $91,000 and the total depreciation deducted since acquisition was $12,000, the...
Paragraph 70(6)(d.1)
Articles
Elie Roth, Tim Youdan, Chris Anderson, Kim Brown, "Taxation of Trusts Resident in Canada", Chapter 3 of Canadian Taxation of Trusts, (Canadian Tax Foundation), 2016.
Extinguishing of unused LP losses (pp. 170-171)
Other than for the purposes of paragraph of 98(5)(g), this paragraph [70(6)(d.1)] provides that...
Subsection 70(6.1)
Administrative Policy
Folio S6-F4-C1, "Testamentary Spouse or Common-law Partner Trusts," 3 February 2022
Application of s. 70(6) rules to NISA
1.60 The income which would otherwise arise as a result of a taxpayer’s death, by virtue of the deemed...
Subsection 70(6.2) - Election
Cases
Picard v. Lagotte Succession, 2017 QCCS 330 (Quebec Superior Court)
Under the will of his deceased wife, the plaintiff (Picard) was a legatee by particular title of her principal residence as well as of an...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 70 - Subsection 70(6) | transfer of estate property to a beneficiary ordered to have “occurred, for tax purposes, at an amount equal to its adjusted cost base” | 184 |
Administrative Policy
Folio S6-F4-C1, "Testamentary Spouse or Common-law Partner Trusts," 3 February 2022
1.5 Making of election. The s. 70(6.2) must be made in the deceased’s regular income tax return for the terminal year of death, and is made on...
12 June 2012 STEP CRA Roundtable, 2012-0442921C6 - STEP CRA Roundtable - June 2012 Q.9
A s. 70(6) election cannot be made in respect of a fractional interest in a property For these purposes each share of a corporation, and all of...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | 78 |
11 July 2007 External T.I. 2006-0206391E5 F - Choix du paragraphe 70(6.2) - société de personnes
A deceased person held an interest in a family farm partnership. Can the executor elect to have s. 70(6) apply to only a portion of the...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | each share, unlike a partnership unit, is a distinct property | 115 |
91 C.R. - Q.43
A legal representative can elect with respect to a portion of the shares, and a formal written statement, although preferred, is not required. An...
6 March 1991 External T.I. 5-910239
RC allows election to be made in respect of a fraction of the total number of identical shares owned by the deceased taxpayer.
90 C.R. - Q55
The representative may not elect with respect to part of a property.
Subsection 70(7)
Administrative Policy
Folio S6-F4-C1, "Testamentary Spouse or Common-law Partner Trusts," 3 February 2022
Examples where s. 70(7) cannot untaint
1.39 Not all tainted spouse trusts can be remedied by the rules provided in subsection 70(7). For example,...
Subsection 70(8)
Paragraph 70(8)(c)
Administrative Policy
Folio S6-F4-C1, "Testamentary Spouse or Common-law Partner Trusts," 3 February 2022
Examples of testamentary debts
1.38 Testamentary debts also include funeral expenses. They can also include testamentary expenses such as...
Subsection 70(9) - When subsection (9.01) applies
Cases
The Queen v. Boger Estate, 93 DTC 5276, [1993] 2 CTC 81 (FCA)
The will of the deceased taxpayer devised a life interest in some lands (the "home quarter") to his wife and the residue of his estate (including...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Trust - Paragraph (g) | meaning of "vested" and "indefeasible" | 121 |
See Also
Bouchard Estate v. MNR, 93 DTC 1511, [1993] 2 CTC 3003 (TCC)
In finding that 50% of the lands of the deceased were used in the business of farming immediately before his death, rather than 10% as reassessed...
Lewis v. MNR, 89 DTC 291, [1989] 2 CTC 2011 (TCC)
In his will a testator gave his wife the rents and profits from a farm until one of his grandsons reached the age of 20, at which time the farm...
Administrative Policy
8 February 2018 External T.I. 2016-0670841E5 - Inter-generational rollover of farm property
Mr. A, whose adult children also are Canadian residents, operates non-adjacent farms, some owned directly, and the others (also located in Canada)...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 70 - Subsection 70(10) - Share of the Capital Stock of a Family Farm or Fishing Corporation | one individual's work can qualify multiple farming corps | 134 |
Tax Topics - Income Tax Act - Section 73 - Subsection 73(4) | rollover is available where one individual working on properties of multiple corps or partnerships | 134 |
2 December 2010 External T.I. 2010-0376451E5 F - Paragraphe 69(11) et transfert de biens agricoles
Upon the death of their father (Mr. X), Sons A and B received a devise of the farm that he had actively farmed until his death, but which was not...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(a) | capital gains exemption could apply where farming property, that was farmed by father but not sons, is devised to sons who then sell | 200 |
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) | s. 69(11) could apply where devisee sells qualified farm property shortly after receiving it under s. 70(9.01) | 178 |
81 C.R. - Q.37
Where property is held under the terms of a will on trust for a child until he attains a specified age, or to his estate if he does not attain...
Paragraph 70(9)(a)
Administrative Policy
6 October 2008 External T.I. 2008-0271421E5 F - Terres à bois-plan d'aménagement forestier Québec
Work was carried out on some of the woodlots of a taxpayer, with a forest producer's certificate under s. 120 of the Québec Forest Act and also...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 73 - Subsection 73(3) - Paragraph 73(3)(c) | Quebec regional agencies’ plans for forest management plans would generally satisfy s. 73(3)(c), whose “engaged” requirement would be met if such plans did not require work | 257 |
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming | woodlot, to be a farm, must focus on the fostering of the stand | 95 |
23 July 2004 External T.I. 2004-0067861E5 F - Transfert d'une terre à bois à un enfant
A taxpayer owning a woodlot received a report from a forestry engineer for a given year setting out the eligible development expenses for the...
Subsection 70(9.01) - Transfer of farming and fishing property to child
Administrative Policy
25 February 2015 External T.I. 2014-0534681E5 F - Interaction of subsections 69(11) and 70(9.01)
Does s. 69(11) apply where s. 70(9.01) applies? CRA responded (TaxInterpretations translation):
Whether or not the taxpayer's legal representative...
Subsection 70(9.2)
Administrative Policy
6 October 2006 Roundtable, 2006-0197151C6 F - Acquisition selon convention entre actionnaires
A shareholders' agreement gives children the right to acquire the shares of a farm corporation for $1 after their father's death. If the children...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(a) | children exercising right in shareholders’ agreement to acquire shares on father's death would not be a consequence of his death, cf. if pursuant to his will | 210 |
Subsection 70(9.4)
See Also
McCreath Trust v. The Queen, 82 DTC 6294 (FCA)
It was held that the beneficial interest of 4 children in the corpus of a trust which had been established by her 7 years before her death, arose...
Subsection 70(10) - Definitions
Child
Administrative Policy
4 November 2011 Internal T.I. 2011-0413341I7 F - Bien agricole admissible
In the course of a general discussion, CRA stated:
For the purposes of subsections 70(9) and 70(9.01), the ordinary meaning of the term "child" is...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming | nursery qualifies as farming if focused on growing rather than selling | 107 |
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Share of the Capital Stock of a Family Farm or Fishing Corporation - Paragraph (a) - Subparagraph (a)(i) | meaning of “actively engaged on a regular and continuous basis” requirement | 152 |
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(c) | s. 110.6(19) election effected a post-1987 acquisition | 159 |
Tax Topics - Income Tax Act - Section 73 - Subsection 73(3) - Paragraph 73(3)(c) | rollover unavailable where taxpayer rented out the land to a farmer | 153 |
19 November 2001 External T.I. 2001-0096455 F - Bien agricole admissible
Mr. X and his father (Mr. Y) had used farmland in a Canadian farming business for the requisite number of years under the s. 110.6 qualified farm...
Share of the Capital Stock of a Family Farm or Fishing Corporation
Administrative Policy
8 February 2018 External T.I. 2016-0670841E5 - Inter-generational rollover of farm property
The transfers of Canadian farming property or of shares of a family farm or fishing corporation or an interest in a family farm or fishing...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - Section 70 - Subsection 70(9) | intergenerational transfer of a farming business can occur where one individual worked on more than one farm | 216 |
Tax Topics - Income Tax Act - Section 73 - Subsection 73(4) | rollover is available where one individual working on properties of multiple corps or partnerships | 134 |
24 December 2012 External T.I. 2012-0457881E5 - Share of a capital stock of a family farm
After stating that the comments in 2000-0011595 were still valid, CRA stated:
CRA would take into account the use of a particular property by a...
Locations of other summaries | Wordcount | |
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Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Share of the Capital Stock of a Family Farm or Fishing Corporation | 189 |
1 March 2000 External T.I. 1999-0011375 - Family Farm Corporation
A corporate partner of a partnership carrying on a farming business would be considered to be carrying on that business.
26 March 1991 T.I. (Tax Window, No. 1, p. 17, ¶1171)
Although whether a member of the board of directors of a corporation is to be considered to be actively engaged in the business is a question of...
Paragraph (a)
Administrative Policy
25 April 2006 External T.I. 2005-0154931E5 F - Action - société agricole familiale
Two unrelated individuals (Mr. X and Mr. Y) who hold 50% respective interests in a general partnership (“S.E.N.C.”) through their respective...
Paragraph (b)
Administrative Policy
11 February 2014 External T.I. 2014-0517611E5 F - Actions d'une société agricole familiale
In year 1 Father purchased Opco, in year 5 he transferred his shares equally to Child 1 who actively explanted the farming business of Opco along...