Paragraph 12(1)(e) - Reserves for certain goods and services, etc.
Cases
Argus Holdings Ltd. v. Canada, 2000 DTC 6681 (FCA)
For accounting purposes the taxpayer, which operated a racquetball club, had brought initiation fees into income over a ten-year period on a...
Sears Canada Inc. v. The Queen, 89 DTC 5039, [1989] 1 CTC 128 (FCA)
The amount of a s. 20(1)(m) reserve which RC had allowed as a deduction in computing the taxpayer's income in 1975 (a year not subject to appeal)...
Dominion of Canada General Insurance Co. v. The Queen, 86 DTC 6154, [1986] 1 CTC 423 (FCA)
Stone JA stated (at p. 6163) that the words of s. 85B(1)(e) (now, s. 12(1)(e)) "are directed toward the inclusion in income of an 'amount' that...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) | 106 |
Abed Estate v. The Queen, 82 DTC 6099, [1982] CTC 115 (FCA)
The taxpayer, who was a U.S. resident, did not file any income tax returns on the ground, later established in court to be unfounded, that he was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(7) | 133 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) | taxpayer did not object to Minister deducting reserve | 159 |
| Tax Topics - Treaties - Income Tax Conventions - Article 7 | 100 |
See Also
Dubawn Holdings Inc. v. The Queen, 94 DTC 1252, [1994] 1 CTC 2527 (TCC)
A reserve which the taxpayer had erroneously deducted from income in his 1984 taxation year (which now was statute-barred) was required to be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(7) - Paragraph 20(7)(a) | 71 |
Administrative Policy
IT-73R6 "The Small Business Deduction" 26 March 2002
Reserve claimed against business income is business income when reversed
4. ... If the original gain on the sale of real property was categorized...
24 March 1995 External T.I. 9507295 - SALE PRICE OF SHARES - CLOSING
Discussion whether an increase in the sale price of shares between the date of an agreement of sale and the closing date represents interest or an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition | 34 |
Paragraph 12(1)(f) - Insurance proceeds expended
Administrative Policy
16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation
A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (e) | compensation for loss of value to lands left after the government agreed to purchase a portion thereof, would constitute proceeds of disposition of such remainder | 123 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) | compensation paid to land owners for their restoration of the portion of their lands not sold to the government would be a s. 12(1)(x) receipt | 122 |
4 March 2015 External T.I. 2014-0550761E5 F - 44(1) et disposition partielle
A portion of a building was destroyed by fire, with a portion of the insurance proceeds used to reconstruct it. CRA stated (TaxInterpretations...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Former Business Property | part of building treated as former business property | 165 |
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) | partial destruction of building | 197 |
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (f) | insurance proceeds received for destruction of part of building: compensation for property damaged rather than destroyed | 76 |
Paragraph 12(1)(g) - Payments based on production or use
Cases
Canada v. Larsen, 99 DTC 5757 (FCA)
The taxpayer and his three siblings gave a lumber company the right to enter their land to remove timber during a five-month period for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 1106 - Subsection 1106(1) | 95 |
The Queen v. Mel-Bar Ranches, 89 DTC 5189, [1989] 1 CTC 360 (FCTD)
A timber-sale agreement between the taxpayer (a farmer) and the purchaser provided for the purchase of 25,500 tonnes "more or less" of fir at a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | 50 |
Consumers' Gas Company Ltd. v. The Queen, 82 DTC 6300, [1982] CTC 339 (FCTD), aff'd, 84 DTC 6058, [1984] CTC 83 (FCA)
Where the taxpayer was compensated for changing the location of its pipelines it was found that the amounts received were not "dependent upon the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Disposition of Property | no disposition of abandoned gas mains | 38 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | cost not reduced by reimbursement right therefor | 134 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | 37 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation for relocating pipelines was capital | 32 |
Porta-Test Systems Ltd. v. The Queen, 80 DTC 6046, [1980] CTC 71 (FCTD)
A royalty to be received by the taxpayer was calculated as the greater of 5% of the licensee's net sales for the following three years and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Patents and Know-How | 154 |
Lackie v. The Queen, 79 DTC 5309, [1979] CTC 389 (FCA)
Payments received by the owner of a gravel pit, equal to $.20 per ton of gravel removed by the licensee, were amounts that were dependent on the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 74.1 - Subsection 74.1(1) | 60 |
MNR v. Gault, 65 DTC 5157, [1965] CTC 261 (Ex Ct)
An arrangement under which a taxpayer, which had purchased the goodwill of an insurance business of the vendor thereof, including client lists,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | 101 |
Gingras v. MNR, 63 DTC 1142, [1963] CTC 194 (Ex Ct)
S.6(1)(j) of the pre-1972 Act was found to be applicable to the sale by the taxpayer to a corporation controlled by him of copyright for a fixed...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Reciprocity | 106 |
Minister of National Revenue v. Wain-Town, 52 DTC 1138, [1952] CTC 147, [1952] 2 S.C.R. 377
The taxpayer, which assigned its franchise to supply municipalities with natural gas to another company in consideration for amounts (described in...
See Also
4432002 Canada Inc. v. The Queen, 2022 TCC 101
The taxpayer, which was owned by an employee (“Huet”) of another company (“Pysis”) and by Huet’s spouse, in May 2009 sold together with...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 184 - Subsection 184(3) | s. 184(3) election conditional on settlement of the CDA dispute, was valid | 129 |
Deragon v. The Queen, 2015 TCC 294
Vendors agreed to sell shares for a sale price of $16 million, of which $2 million was payable in subsequent years only if an EBITDA condition...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) | sales proceeds reduced by subsequent price adjustment clause but included conditional sales proceeds | 480 |
| Tax Topics - General Concepts - Effective Date | proceeds reduced by subsequent settlement pursuant to price adjustment clause | 205 |
Smith v. The Queen, 2011 DTC 1332 [at at 1870], 2011 TCC 461
The taxpayer sold the client list respecting his insurance brokerage business for a stipulated dollar sale price (payable in five annual...
Wright v. The Queen, 2003 DTC 763 (TCC)
The taxpayers and their father had used 430 acres of a 5,700 acre property in Manitoba for farming for many years before farming ceased in the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | 122 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | sale of timber from former farm on capital account | 122 |
Rouleau v. MNR, 91 DTC 120 (TCC)
On the sale of the taxpayer's chartered accountancy practice, it was agreed that the sale price for the goodwill would be 20% of gross fees earned...
289018 Ontario Ltd. v. MNR, 87 DTC 38, [1987] 1 CTC 2095 (TCC)
The proceeds from the sale by the taxpayer of a technological equipment business consisted of a fixed cash payment and further cash payments...
Brosseau v. MNR, 86 DTC 1412, [1986] 1 CTC 2558 (TCC)
The taxpayer sold his accounting practice for a price equal to 20% of gross revenue received from his former clientele over the following five...
Pacific Pine Co., Ltd. v. MNR, 61 DTC 95 (TAB)
S.6(1)(j) of the pre-1972 Act did not apply where the taxpayer sold a timber licence for a purchase price payable in 16 quarterly instalments...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Leases and Licences | 104 |
Mr. R. v. MNR, 50 DTC 398 (ITAB)
An agreement for the assignment by the taxpayer to a drug company of the taxpayer's rights under patent to a medicinal preparation in...
Administrative Policy
1 February 2024 External T.I. 2023-0994141E5 - Cost Recovery Method in IT-426R (Archived)
After referring to its conclusion in 2021-0884651E5 that the cost recovery method (as described in IT-426R) cannot be applied, where a Canadian...
29 November 2022 CTF Roundtable Q. 11, 2022-0949761C6 - Earnout Agreement
Earnout based on subsidiary goodwill
One of the conditions provided in IT-426R for application of the cost recovery method (in subpara. 2(c)) is...
17 May 2022 External T.I. 2021-0884651E5 - Cost Recovery Method in IT-426R (Archived)
The vendor of a minority (capital property) shareholding (under 5%) of a U.S. company (TargetCo) is a limited partnership (“Partnership”) with...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 229 - Subsection 229(1) | T5013 return is not a return of income | 128 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Canadian Resident Partnership | “Canadian resident partnership” is not a person “resident in Canada” | 143 |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) | “Canadian resident partnership” is not a person “resident in Canada” (although it is resident for income computation purposes) | 160 |
7 October 2021 APFF Roundtable Q. 8, 2021-0900981C6 F - Cost Recovery Method in IT-426R (Archived)
Where a limited partnership with resident and non-resident partners sells shares subject to an earnout, it is difficult to comply with paras. 2(e)...
3 December 2019 CTF Roundtable Q. 12, 2019-0824531C6 - Earnout and Cost Recovery Method
The proceeds of disposition of the shares of Company A are determined pursuant to an earnout clause, which is based on the future earnings...
2015 Ruling 2015-0589471R3 - Earnout
Background
The corporate Shareholders (with equal shareholdings) of Holdco (a Canadian-controlled private corporation) wish to sell X% of their...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Safe-Income Determination Time | safe income determination time for a subsequent contemplated annual common share dividend was immediately before that dividend rather than a prior dividend or s. 55(3)(a)(ii) or (v) increase | 654 |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) | s. 85(1) rollover available on dirty s. 85 exchange | 92 |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) | utilization of safe income as earned through a contemplated succession of dividends of all the annual earnings | 203 |
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a) | transactions for using s. 7 rules on sale of non-treasury shares | 212 |
10 March 2015 External T.I. 2014-0552551E5 F - Vente du droit d'exploiter une sablière
A partnership which owns a "qualified farm or fishing property" sells the right to operate the sand pit to a municipality for a fixed sum. Does a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | application of capital gains criteria on woodlots to sale of rights to extract sand | 51 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property | sale of rights to extract sand could be considered sale of qualified farm or fishing property | 180 |
12 January 2015 External T.I. 2014-0555071E5 - POD subject to earn-out
In an arm's length sale, the corporate "Vendor" disposes of the "Property" (including land options agreements, permits, engineering data and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | proceeds of goodwill on sale of wind turbine development project | 231 |
| Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Cumulative Canadian exploration expense - Element G | proceeds of wind turbine development project | 147 |
| Tax Topics - Income Tax Regulations - Regulation 1219 - Subsection 1219(1) | wind turbine development project | 108 |
27 August 2014 External T.I. 2014-0529221E5 F - Changement de méthode pour déclarer un gain
Could a taxpayer, who did not use the cost recovery method to report the capital gain on the disposition of shares subject to an earnout agreement...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2) | administrative policy on earnout calculation was not an election | 128 |
24 February 2014 External T.I. 2013-0505391E5 F - Clause de earnout renversé
CRA confirmed its position in 2000-0051115 that:
Where the cost recovery method is not used and the sale price of a property is not certain at the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) | a sale price that is subject to a reverse earnout is not considered to be payable after the year (no reserve) | 195 |
14 May 2013 External T.I. 2013-0480561E5 F - Méthode de recouvrement du coût
Mr. A holds all the shares of a Canadian-controlled private corporation (Aco), which has a calendar fiscal period and whose only asset is shares...
20 December 2011 External T.I. 2011-0423771E5 - Payments Based on Production or Use
The position in IT-462, para. 5(c) (respecting the sale of property for a fixed sum plus additional amounts based on production exceeding a...
18 December 2001 External T.I. 2001-0114435 F - Capacité de gain - Earn Out
Regarding the statement in para. 1(d) of the February 19, 1979 version of IT-426 that "the duration of the sale agreement does not exceed 5...
23 March 2011 Internal T.I. 2010-0389081I7 F - Disposition of a resource property
The Vendor sold a percentage interest in mineral claims for consideration including shares to be issued by the public-company purchaser, to be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - cumulative Canadian development expense - Element F | proceeds from mineral claims sale included undiscounted deferred cash proceeds, but might exclude share consideration until issued; purchaser’s CEE obligation excluded | 390 |
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) | proceeds included full (undiscounted) deferred cash proceeds, but might exclude share consideration (with volatile market price) until issued | 175 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) | full undiscounted amount of future cash consideration to be included as an amount receivable | 209 |
9 July 2003 External T.I. 2003-0183675 F - VENTE D'UNE LISTE DE CLIENTS
Three alternative scenarios apply to the sale of the client list of a retiring professional:
1. The sale price will be 25% of the fees earned over...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 24 - Subsection 24(1) | loss under s. 24(1)(a) where maximum sales price (equaling FMV) for sold client list is not achieved | 194 |
11 May 2001 Internal T.I. 2001-0072367 - Accrued Royalty Income
Respecting a submission that accrued royalties were not required to be included in the taxpayer's income because they were not received in the...
20 December 2002 External T.I. 2002-0164735 F - PRODUIT DE DISPOSITION ACHALANDAGE
On a sale of the business of a pharmacist, the consideration for the goodwill sold is equal to the number of prescriptions sold over a 12-month...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital - Variable E | full potentially receivable amount must be recognized, notwithstanding subsequent possible downward adjustment | 266 |
21 January 2002 External T.I. 2001-0078735 F - Droit de recevoir une somme
The shareholders of a CCPC (Xco) agreed to sell their Xco shares to a public corporation (Yco) in consideration for an upfront cash payment, and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition | FMV of contingent right to deferred cash sales proceeds was included in proceeds, with subsequent gain or loss when the contingency was resolved | 224 |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(f) | s. 85(1)(f) applicable to contingent right to receive deferred cash sales proceeds to the extent the share consideration received under s. 85(1) declined in value | 138 |
24 September 1997 External T.I. 9718365 - PROCEEDS BASED ON PRODUCTION OR USE
S.12(1)(g) can apply to the disposition of a partnership interest.
20 January 1994 Internal T.I. 9329727 F - Woodlots Which Are Not Incidental to Farming Operations
Re application of s. 12(1)(g) to woodlot operation.
30 December 1992 T.I. (Tax Window No. 27, p. 5, ¶2321)
S.12(1)(g) does not apply where the consideration received for the sale of software includes a note the timing of payment of which depends on the...
2 September 1992 Memorandum (Tax Window, No. 24, p. 17, ¶2222)
The sale of cutting rights for a fixed price for a fixed quantity of timber to be taken within a fixed period of time will not be subject to s....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | 55 |
IT-462 "Payments Based on Production or Use"
5. When paragraph 12(1)(g) requires proceeds of dispositions of property to be included wholly or partly as income, subject to 3 above, the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | 42 |
IT-426R "Shares Sold Subject to an Earnout Agreement" 26 Ocober 2004 (Archived)
Conditions for use of cost recovery method
2. Taxpayers may use the cost recovery method if the following conditions are met:
(a) The vendor and...
Articles
Kim Maguire, Jeffrey Shafer, "Trends in Buy/Sell Transactions", draft 2021 Conference Report
Whether s. 12(1)(g) can apply to a share sale (p. 3)
- Since most contingent consideration for a share sale will relate to earnings or other...
Warren Pashkowich, Daniel Bellefontaine, "Participation-Based Payments: What Are They and How are They Taxed", 2017 Conference Report (Canadian Tax Foundation), 9:1-25
Whether the referenced property is restricted to property that was sold (pp. 9:9-10)
[T]he the inclusion of the definite article “the”...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c.3) - Subparagraph 88(1)(c.3)(i) | 279 |
Scheuermann, "Income and Commodity Tax Aspects of Acquiring and Exploiting Technology", 1991 Conference Report, c. 45.
Richardson, "Purchase and Sale of a Business: Income Tax Aspects of Warranties, Price Adjustments and Earn-Outs", 1990 Corporate Management Tax Conference Report, pp. 10:11-10:23.
Paragraph 12(1)(i) - Bad debts recovered
See Also
Beck v. MNR, 92 DTC 1784, [1992] 2 CTC 2085 (TCC)
The taxpayer, which in 1983 had written off a debt owing to it by a corporation ("Brenloc"), in 1984 participated in transactions pursuant to...
Paragraph 12(1)(j) - Dividends from resident corporations
Cases
Banner Pharmacaps NRO Ltd. v. Canada, 2003 FCA 367, 2003 DTC 5642 (FCA)
The wholly-owned Canadian subsidiary of the taxpayer declared a dividend on its shares, with the resolution stipulating that the dividend was to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Payment & Receipt | promissory note accepted as payment | 139 |
| Tax Topics - Income Tax Act - Section 133 - Subsection 133(8) - Non-Resident-Owned Investment Corporation | dividend received when note issued/such note not a money-lenidng business | 227 |
Paragraph 12(1)(l.1) - Partnership — interest deduction add back
Administrative Policy
28 July 2015 External T.I. 2015-0567811E5 - Thin cap rules for members of a partnership
Canco (wholly-owned by NRco) and its wholly-owned subsidiary (Canco Sub) hold respective 99.9% and 0.1% interests in the "Partnership," which does...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(7) | sale by Cancos of their partnership interests part-way through year did not eliminate their proportionate pick-up of partnership debt | 156 |
Articles
Shane Onufrechuk, Warren Pashkowick, "Tax Considerations of Major Construction Projects", 2014 Conference Report, Canadian Tax Foundation, 10:1-35.
Proxy income inclusion does not boost unit ACB (p. 10:13)
[I]f a corporate partner exceeds the permitted 1.5:1 ratio, interest expense on...
Paragraph 12(1)(n.2)
Administrative Policy
23 April 2021 External T.I. 2020-0872371E5 - Sabbatical leave plan - Application of SDA rules
After finding that a sabbatical leave plan did not satisfy the requirements of Reg. 6801(a) as a deferred salary leave plan (for multiple reasons...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 6801 - Paragraph 6801(a) | offside sabbatical leave plan given length and timing of the sabbatical leave and the notional employer contributions | 236 |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(11) | consequences of a sabbatical leave plan being offside the SDA rules | 275 |
| Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(o) | s. 8(1)(o) deduction when employer notional contributions to off-side sabbatical leave plan | 161 |
Paragraph 12(1)(n.3) - Retirement compensation arrangement
Administrative Policy
17 December 2010 External T.I. 2009-0338841E5 - Characterization of Income from an RCA
Are amounts received by an employer on the winding-up of an RCA (where its contributions were deducted in computing its business income) included...
31 March 1995 External T.I. 9502955 - LETTER OF CREDIT-RCA
"Any amount received by the employer from a custodian as a refund of refundable taxes is included in the employer's income under paragraph...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(2) | 51 |
Paragraph 12(1)(o)
Cases
Midwest Oil Production Ltd. v. The Queen, 82 DTC 6092, [1982] CTC 107 (FCTD), aff'd 83 DTC 5304, [1983] CTC 338 (FCA)
Because the word "receivable" relates to a change in custody or possession, not to a change in ownership, a royalty obligation to deliver crude...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 169 | 57 | |
| Tax Topics - Income Tax Act - Section 172 - Subsection 172(2) | 57 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Amount | 17 |
Paragraph 12(1)(p)
Administrative Policy
26 June 2014 External T.I. 2014-0523871E5 F - Revenu d'entreprise agricole
Is AgriInvest and AgriStability income support, received by a farmer, farming income or other income to that individual? CRA stated:
The...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming | legume germination production as farming | 38 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(10.2) | government contributions and accrued interest in AgriInvest and Agri-Québec accounts are taxable when withdrawn | 156 |
Paragraph 12(1)(r) - Inventory adjustment
Administrative Policy
93 CPTJ - Q.5
The word "obsolescence" in s. 12(1)(r) is considered to refer to an amount respecting obsolescence of fixed assets where such amount is included...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 31 |
Paragraph 12(1)(t) - Investment tax credit
Administrative Policy
15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)
The federal apprenticeship job creation tax credit ("AJCTC") is generally included in income under s. 12(1)(t). CRA noted:
Paragraph 12(1)(t)...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) | timing of receipt of apprenticeship training tax credit | 75 |
9 January 2002 External T.I. 2001-0075825 F - CII-LIQUIDATION
A subsidiary sells all of its depreciable property to a third party and, during the same taxation year, commences to be wound up into its parent,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(e.2) | parent has an s. 12(1)(t) inclusion in its year beginning after the winding-up if the sub claimed winding-up year ITCs respecting depreciable property which it sold before wind-up | 188 |
Paragraph 12(1)(x) - Inducement, reimbursement, etc.
Cases
Glencore Canada Corporation v. Canada, 2024 FCA 3
An integrated nickel-mining public company (“Falconbridge”), entered into merger agreements with a more junior public company (“Diamond...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | break fee was a capital receipt | 188 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | break fee was not consideration for the disposition of a merger right as there was no such “right” | 215 |
| Tax Topics - Income Tax Act - Section 54 - Capital Property | break fee was not proceeds of disposition of a capital property | 176 |
Imperial Oil Resources Limited v. Canada (Attorney General), 2008 DTC 6657, 2008 FC 1037
The Alberta government gave the taxpayer a reduction in the royalties it would otherwise have to pay to Alberta on condition that the taxpayer...
Iron Ore Co. of Canada v. The Queen, 2001 DTC 5411, 2001 FCA 224
The taxpayer made an unsuccessful submission that a refund of Quebec sales tax was not a "refund" described in s. 12(1)(x(iv) because the word...
Canada Safeway Ltd. v. R., 98 DTC 6060, [1998] 1 CTC 120 (FCA)
In finding that a refund of federal sales tax that predecessors of the taxpayer previously had paid in error did not qualify as a reimbursement...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Timing | 35 |
The Queen v. CCLC Technologies Inc., 96 DTC 6527, [1996] 3 CTC 246 (FCA)
An agreement the taxpayer entered into with the province of Alberta concerning a coal and heavy oil project was found to have resulted in the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | contribution arrangement under which the government could not generate a profit was "other assistance" | 130 |
Westcoast Energy Inc. v. The Queen, 91 DTC 5334, [1991] 1 CTC 471 (FCTD), briefly aff'd 92 DTC 6253 (FCA)
Damages which the taxpayer received in settlement of its suit based on the direct and indirect costs incurred by it in replacing a defective pipe...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 84 |
See Also
Verrier v. Agence du revenu du Québec, 2024 QCCA 298
The taxpayer (Verrier) and other clients of an insurance broker (Chabot) participated in a scheme of Chabot to defraud life insurance companies...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Provincial Law | s. 12(1)(x) and Quebec equivalent were to be interpreted similarly | 199 |
Quintal v. Agence du revenu du Québec, 2023 QCCQ 37, effectively overuled in part by Verrier v. ARQ, 2024 QCCA 298
The taxpayer (Quintal) and other clients of an insurance broker (Chabot) participated in a scheme of Chabot to defraud life insurance companies...
Scotti v. Agence du revenu du Québec, 2019 QCCQ 7579, effectively overruled in part by Verrier v. ARQ, 2024 QCCA 298
An insurance broker (Mr. Chabot) agreed with the taxpayer (Mr. Scotti), as an inducement for Mr. Scotti to acquire a universal whole life policy...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) | failure to seek advice on taxability of $90,000 of receipts | 371 |
GMAC Leaseco Corporation v. The Queen, 2015 DTC 1141 [at at 908], 2015 TCC 146
General Motors of Canada Limited ("GMC") made "residual value support payments" to the taxpayer ("GMAC"), which purchased vehicles subject to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.4) | amounts replaced reduced lease income rather than contributing to leased vehicles' cost | 239 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | capital tax accrued from day to day | 226 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | payments received in consideration for reducing lease payments were compensation for lost lease income, and s. 9 income | 284 |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | surcharges received by lessor at lease termination for excess use were income | 264 |
| Tax Topics - Income Tax Act - Section 9 - Timing | inducement payments received by lessor from manufacturer not income until potential repayment obligation quantified | 221 |
Henco Industries Limited v. The Queen, 2014 DTC 1161 [at at 3528], 2014 TCC 192
A subdivision property of the taxpayer, a developer, was blockaded by Six Nations protesters. To diffuse the conflict, the Ontario government...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | parol evidence rule not applying to surrounding evidence/press releases admitted | 239 |
| Tax Topics - General Concepts - Fair Market Value - Land | deference to taxpayer's figure within appraiser's range of values | 111 |
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | payment to withdraw from business was not an eligible capital amount | 146 |
| Tax Topics - Income Tax Act - Section 23 - Subsection 23(1) | land ceased to be inventory through sterilization rather than business cessation | 184 |
| Tax Topics - Income Tax Act - Section 3 | compensation payment for destroyed business was non-taxable | 171 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation payment for destroyed business was non-taxable | 171 |
Immunovaccine Technologies Inc. v. Canada, 2014 DTC 5119 [at at 7309], 2014 FCA 196, aff'g 2013 DTC 1101 [at 531], 2013 TCC 103
Under a federal program for fostering Maritimes development, the taxpayer received interest-free advances, which were not characterized as...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | "government assistance" generally encompasses amounts advanced on non-commercial terms | 271 |
| Tax Topics - Statutory Interpretation - Ejusdem Generis | definition ending in "any other form of assistance" precluded a narrow reading | 82 |
Morguard Corporation v. The Queen, 2012 DTC 1099 [at at 2959], 2012 TCC 55, aff'd 2013 DTC 5009 [at 5554], 2012 FCA 306
After finding that break fees totalling $7.7 million received by the taxpayer in an unsuccessful acquisition attempt were fully taxable to it...
Alberta Power (2000) Ltd. v. The Queen, 2009 DTC 1514, 2009 TCC 412
On the early termination of a power purchase agreement between the taxpayer and the Alberta government, the taxpayer received $59.7 million from...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | person with the benefits and burdens of ownership was the beneficial owner | 243 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | 56 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | amount was received in respect of impaired capital asset (which then was transferred to payor) rather than for lost profits | 111 |
PSC Elstow Research Farm Inc v. The Queen, 2009 DTC 168, 2008 TCC 694
Research grants received by the parent of the taxpayer were not includible in its income under s. 12(1)(x) to the extent that such assistance was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(19) | 53 | |
| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(c) | 113 |
Hudson Bay Mining and Smelting Co., Ltd. v. The Queen, 2003 DTC 173 (TCC)
Tax credits received by the taxpayer from the Manitoba government were in respect of Canadian exploration expenses that it incurred as agent for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Specific v. General Provisions | 68 |
Coughlan v. The Queen, 2001 DTC 719 (TCC)
Damages received by the taxpayer from a corporation of which he formerly was an officer and shareholder for conspiring to injure his reputation,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 137 |
Bois Aisé De Roberval Inc. v. R., 99 DTC 380, [1999] 4 CTC 2161 (TCC)
A refund of export taxes previously paid by the taxpayer was deemed to be income under the revised version of s. 12(1)(x)(iv), which had been...
Quincaillerie Laberge Inc. v. The Queen, 95 DTC 155 (TCC)
After finding that $575,000 received by the taxpayer for agreeing to extend the term of a loan for $10,500,000, rather than exercising its rights...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | amendment of agreement did not entail its transfer | 142 |
Hill v. The Queen, 94 DTC 1078, [1994] 1 CTC 2169 (TCC), aff'd 95 DTC 5225 (FCA)
A law firm of which the taxpayer was a member was required to use a portion of the amount paid or to be paid to it as an inducement to sign a new...
Tyoxide Canada Inc. v. The Queen, 93 DTC 1499, [1994] 1 CTC 2569 (TCC)
A Quebec tax credit, calculated as 10% of the wages of Quebec employees engaged in research activities, was included in income of the taxpayer for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(11.1) - Paragraph 127(11.1)(c) | 36 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Amount | 19 |
Everett's Truck Stop Ltd. v. The Queen, 93 DTC 965, [1993] 2 CTC 2658 (TCC)
The assumption by another corporation ("Polar Oils") of the obligation of the taxpayer to pay $119,658 in consideration for the taxpayer's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 244 - Subsection 244(14) | 96 |
St. John Dry Dock & Shipbuilding Co. v. MNR (1944), 2 DTC 663 (Ex Ct)
Before concluding that a subsidy received by the taxpayer from the federal government, pursuant to a statute, for the construction of a dry dock...
Higgs v. Olivier (1952), 33 TC 136 (C.A.)
Before going on to find that a lump sum received by an actor in consideration for his covenant not to exercise his vocation for a period of 18...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | 129 | |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 129 |
Administrative Policy
8 September 2023 Internal T.I. 2023-0987091I7 - Trailing Commissions and Dealer Rebates
S. 12(2.1) deems an amount received by a beneficiary of a trust as an inducement in respect of activities of the trust, or as a reimbursement or...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) | trailer commissions which are temporarily paid by MFT to OEO dealer for it to fund rebates to client MFT unitholders are s. 12(1)(x) inclusions to MFT | 206 |
28 September 2023 CLHIA Roundtable Q. 2, 2023-0971711C6 - Reimbursement by advisor of policyholder expense
Client B agreed to acquire a life insurance policy from Advisor A, and Advisor A agreed to repay Client B for the accounting fees Client B...
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 10, 2022-0938301C6 F - Rebate on purchase of GIC
Normally, on the purchase by a client of a GIC of a bank, the bank would receive the face amount of the GIC (say, $21,000) and pay a broker a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base | broker-waived commission included in cost of GIC | 195 |
16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation
A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (e) | compensation for loss of value to lands left after the government agreed to purchase a portion thereof, would constitute proceeds of disposition of such remainder | 123 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) | compensation for damages to depreciable property would be included under s. 12(1)(f) rather than under proceeds of disposition, but the related repaid expenses would be deductible | 126 |
2 November 2021 External T.I. 2021-0898151E5 - GST/HST Quick Method of Accounting
When qualifying small registrants elect to use the “Quick Method” of accounting for GST/HST obligations, they thereby cease to be entitled to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(16) | GST/HST Quick Method generally results in a s. 12(1)(x) inclusions, but also increases expense deductions since no s. 248(16) inclusion | 187 |
15 February 2021 Internal T.I. 2021-0879231I7 - Application of paragraph 12(1)(x) to a forgivable
The Regional Relief and Recovery Fund (“RRRF”) provides liquidity assistance for COVID-affected businesses that have been unable to access...
6 November 2020 Internal T.I. 2020-0865661I7 F - SSUC-moment de l'inclusion au revenu/CEWS-inclusion in income
S. 125.7(3) essentially feeds into s. 12(1)(x) by deeming “CEWS” wage subsidies to be government assistance received immediately before the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(3) | CEWS amounts must generally be included in income under s. 9 or 12(1)(x) by the end of the CEWS periods in question even if not claimed until much later | 415 |
Frequently Asked Questions – Temporary Wage Subsidy for Employers 30 March 2020 CRA Webpage
- The subsidy equals 10% of the remuneration paid between March 18, 2020, and June 20, 2020, to a maximum of $1,375 per employee and of $25,000 per...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.02) | 459 |
Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019
s. 125.6(2) credit treated as s. 12(1)(x) inclusion
3.21. The amount of the Canadian journalism labour tax credit for a taxation year is...
12 March 2012 External T.I. 2011-0425361E5 F - Assistance paid by franchisor
A franchisor organizes a contest which is restricted to franchisees. Awards received by a franchisee would be considered to be non-governmental...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | reimbursements of business expenses increase income | 183 |
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...
| 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 53 - Subsection 53(1) - Paragraph 53(1)(c) | German profit transfer payment to loss subsidiary is contribution of capital | 158 |
16 February 2016 External T.I. 2015-0618601E5 - Earned or Unearned Revenue
The taxpayer received a lump-sum payment (the “Payment”) from a major supplier (“ACo”) in consideration for entering into a supplier...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(2) | no deferral of lump sum received on signing 15-year supplier loyalty agreement | 182 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) | no deferral for amount included under s. 56.4(2) or 12(1)(x) | 126 |
15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)
The Ontario apprenticeship training tax credit ("ATTC") is generally included in income under s. 12(1)(x). After noting that a tax credit is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(t) | federal apprenticeship job creation tax credit | 91 |
15 September 2014 Internal T.I. 2014-0545001I7 - Grants paid to employers of reservists
Amounts that are received from the Compensation for Employers of Reservists Program by employers of reservists and by self-employed individuals...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | compensation for reservist costs | 40 |
12 July 2011 Internal T.I. 2010-0366321I7 - Tax treatment of break fees received
In indicating that a break fee should be included in income under s. 12(1)(x) even if it were not includable under s. 9(1), CRA indicated that per...
12 September 2012 Annual CTF Roundtable, 2012-0453381C6 - 2012 CICA Conference
An insolvent (but not bankrupt) company negotiates a settlement with CRA of unremitted GST for less than the balance owing. CRA stated that "this...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount | tax debt not a commercial debt obligation | 113 |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | forgiveness of source deductions on income account | 108 |
21 March 2011 External T.I. 2011-0395011E5 - Deductibility of Ontario SAT
A particular Ontario tax on life insurance corporations ("SAT") is determined as a fixed percentage of the amount by which the corporation's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 156 |
8 October 2010 Roundtable, 2010-0371901C6 F - avantage à l'actionnaire, assurance-vie
Question 2 at the May 4, 2010 CALU Roundtable concerned the situation where (A) Holdco holds an insurance policy on the life of its shareholder,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) | CRA will examine if there is a s. 246(1) benefit where subsidiary is beneficiary of life insurance policy held and paid for by parent | 239 |
4 May 2010 Roundtable, 2010-0359401C6 - Rebate Paid by an Advisor to a Policyholder
In certain provinces, a licensed insurance advisor is permitted to pay a portion of the commission earned as a "rebate" to a client purchasing an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 148 - Subsection 148(9) - Adjusted Cost Basis - Element A | insurance premium rebate paid by broker does not reduce policy ACB | 260 |
11 February 2009 External T.I. 2008-0271381E5 - Commision Rebates
A broker makes a payment to a customer out of the commissions earned from an insurance company, as permitted by legislation of the Insurance...
6 May 2009 External T.I. 2008-0295581E5 F - Bourses et aide financière aux médecins
Various programs designed to encourage physicians to settle in remote areas of Quebec. Under one such program, financial assistance is granted to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n) | specialized training grants made to unlicensed medical residents to encourage them to settle in remote areas were s. 56(1)(n) fellowships | 156 |
4 July 2007 Internal T.I. 2007-0238391I7 F - Crédit pour stage en milieu de travail
The Quebec tax credit for an on-the-job training period was includible in income under s. 12(1)(x) to the extent that it did not reduce the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) | inclusion under s. 12(2.1) where Quebec job credit received by partnership members | 67 |
2008 Ruling 2006-0217541R3 - Stock Option Reimbursement
A Canadian public company ("Parentco") and non-resident subsidiaries ("Subco1 and Subco2", collectively "Subco") enter into a "Recharge...
17 February 2006 External T.I. 2005-0153931E5 F - Primes d'installation médecins
Regarding a location incentive program of the Quebec government for medical practitioners setting up in designated territories, CRA...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) | signing bonuses to medical practitioners to locate in remote areas are a taxable benefit | 95 |
2004 Ruling 2004-007680
//www.bci.ca/">www.bci.ca): Non-capital losses of BCI are transferred to its affiliate, Bell Canada, pursuant to transactions under which a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 152 |
28 April 2004 Internal T.I. 2004-0066991I7 F - Paiement incitatif
As an incentive for the sale of exempt life insurance policies (having a savings and investment component) a life insurance brokers would pay to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | property “includes practically any type of economic interest” | 142 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | per MacIntyre, life insurance premiums are not deductible from business income | 192 |
18 March 2003 External T.I. 2002-0122845 F - CREDIT D'IMPOT POUR LE DOUBLAGE DE FILMS
CCRA indicated that the Quebec tax credit for film dubbing under s. 1029.8.36.0.2 of the Taxation Act (Quebec) is considered to be received for...
26 July 2001 External T.I. 2001-0083295 - INTERACTION OF QST
A Quebec sales tax input tax refund is included in income under s. 12(1)(x) when received.
25 May 2001 Internal T.I. 2001-008500A - Damage/Compensation Receipts
The receipt in Westcoast Energy Inc. v. The Queen, 91 DTC 5334 (FCTD), affirmed 92 DTC 6253 (FCA) would not be considered to be a "refund,...
2001 Ruling 2000-003987
Cash receipts of a partnership for assuming contingent liabilities (respecting unfunded supplemental pension and other retirement benefit...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | 123 |
18 September 2000 External T.I. 2000-0029465 - REIMBURSEMENT ON ISSUING SHARES
Where a Canadian parent is reimbursed by its foreign subsidiary for the difference between the exercise price and the fair market value of shares...
15 November 1999 External T.I. 9924585 - PREPAID RENT&SALE OF BUILDING
A corporation that has received prepaid rent with respect to a building leased by it to another Canadian corporation then transfers the building...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) | prepaid rent on related-party building transfer | 33 |
7 July 1999 External T.I. 9824115 - PROVINCIAL INVESTMENT TAX CREDIT
A provincial investment tax credit is considered to be "received" by the taxpayer at the time it is deducted. Similarly, an investment tax credit...
5 February 1998 External T.I. 9729535 - ASSISTANCE
Respecting a loan that is repayable out of projected revenues, the Directorate stated that "a loan would be a forgivable loan to the extent that...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125.4 - Subsection 125.4(1) - Assistance | 19 |
30 November 1996 Ruling 9707693 - INDUCEMENT - SHARE REDEMPTION
The redemption of shares for a nominal amount pursuant to their terms would not constitute an inducement for purposes of s. 12(1)(x) as any...
29 October 1996 External T.I. 9626325 - BOND OPTIONS
S.12(1)(x) could apply to the receipt by a corporation of a premium for granting an option to require it to issue bonds, depending on the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 95 |
11 January 1996 External T.I. 9526845 - ALBERTA GOVERNMENT ASSISTANCE-SMALL BUSINESS EQUITY
A grant made pursuant to the initial Small Business Equity Corporations Act (Alberta) to a taxpayer for the purchase of venture capital...
1 February 1994 External T.I. 9332265 F - Inducement
Where the manager of a mutual fund trust rebates a portion of the management fee earned by it directly to investors who have invested substantial...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) | MFT management fees rebated by manager to large unitholders produce s. 12(2.1) inclusion | 87 |
1994 A.P.F.F. Round Table, Q. 41
"There may be constructive receipt by a taxpayer when an amount is entered as a credit to his account or, as in Everett's Truck Stop Ltd., that is...
94 CPTJ - Q. 1
The Alberta royalty tax credit is not included in a taxpayer's income under s. 12(1)(x).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 1 | 52 | |
| Tax Topics - Excise Tax Act - Section 153 - Subsection 153(3) | 11 | |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) | 35 |
2 December 1993 External T.I. 9321035 F - Taxation of GST and Other Rebates
The Ontario Farm Tax Rebate (entailing a rebate of 75% of property taxes paid on eligible farm land and out-buildings by eligible owners) is...
5 November 1993 External T.I. 9320085 F - Farm Support Payments
Respecting guarantees by the Province of Saskatchewan of loans made to farmers where the Province did not waive its subrogation rights, the...
27 October 1993 Income Tax Severed Letter 9319925 - Farm Support Payments
A loan from the Agricultural Credit Corporation of Saskatchewan generally would be regarded as a forgivable loan and, therefore, as assistance "to...
26 February 1993 T.I. (Tax Window, No. 29, p.17, ¶2440)
A reimbursement or other assistance received in respect of eligible capital property cannot be applied to offset the cost amount of that property...
10 February 1993 T.I. 921720C (See also 13 January 1993 T.I. 923304)
Amounts paid to Atlantic hog farmers were repayable, except that "if certain conditions subsequent are met they may be forgiven". The Directorate...
8 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2437)
Credits under the Quebec Mining and Duties Act do not fall within the ambit of s. 12(1)(x).
December 1992 B.C. Tax Executives Institute Round Table, Q.13 (October 1993 Access Letter, p. 481)
It is a question of fact whether a lease cancellation payment received by a tenant would be excluded from the application of s. 12.1(x) by s....
"Farm Support Payments: A Paper by the Rulings Directorate addressed to Agriculture Canada - 1992" (September 1993 Access Letter, p. 426).
7 November 1992 Memorandum (Tax Window, No. 27, P. 21, ¶2354, October 1993 Access Letter, p. 478)
Ontario's super allowance for scientific research and current cost adjustment is not considered to be government assistance, incentives or tax...
12 October 1992 T.I. 922359 (September 1993 Access Letter, p. 406, ¶C9-283)
Where an amount is included in income under s. 9, s. 12(1)(x) will not apply and, therefore, the election under s. 13(7.4) will not be available.
31 August 1992 External T.I. 5-921279
Payments made by a non-resident corporation to a related corporation to indemnify it for potential penalties and interest relating to income and...
30 November 1991 Round Table (4M0462), Q. 8.2 - Subscription to Preferred Shares by a Government Body (C.T.O. September 1994)
Where an investment by a government body in shares that pay no dividends does not represent an ordinary business investment, RC generally is of...
30 November 1991 Round Table (4M0462), Q. 8.1 - Acquisition of a Business (C.T.O. September 1994)
"A payment as an inducement covered by subparagraph 12(1)(x)(i) to 12(1)(x)(iii) that is received as part of the acquisition of a business will be...
91 C.R. - Q.19
It is a question of fact whether a contribution of capital by a shareholder to a corporation to fund the acquisition of a capital asset can...
1 August 1991 T.I. (Tax Window, No. 7, p. 18, ¶1382)
The Nova Scotia research and development tax credit (which is a deduction in computing provincial income tax) is government assistance, whereas...
26 July 1991 T.I. (Tax Window, No. 7, p. 2, ¶1376)
No general conclusion has been reached as to whether s. 12(1)(x) may apply to include a premium in the income of the issuer of commercial paper.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 22 |
20 March 1991 T.I. (Tax Window, No. 1, p. 2, ¶1158)
FST inventory rebates received pursuant to s. 120 of the Excise Tax Act are considered to be assistance in respect of the cost of property or an...
17 January 1991 Internal T.I. 7-90326
The interest component of damages received by a limited partnership in respect of interest assessments of its partners as a result of the failure...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | 43 |
17 January 1991 Memorandum (Tax Window, No. 1, p. 4, ¶1150)
As a result of the amendments to s. 12(1)(x)(iv) effective 1 January 1990 all damages received after that date are included in s. 12(1)(x)(iv),...
14 December 1990 T.I. (Tax Window, Prelim. No. 2, p. 23, ¶1056)
Most grants received under the Ontario Fast Start Program will be taxable under s. 12(1)(x).
30 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 17, ¶1067)
A government loan under which the corporation must commence repayment on the earlier of 2004 and the time at which cumulative sales levels have...
4 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 6, ¶1023)
Where a tenant inducement payment is required to be included in income under s. 9 in accordance with GAAP, s. 12(1)(x) has no application, and no...
19 September 1990 Memorandum ACC 96248
"Where any possibility of forgiveness is inherent in the terms and conditions of a loan agreement, paragraph 12(1)(x) applies to the principal...
90 C.P.T.J. - Q.14
Even prior to the replacement in s. 12(1)(x)(iv) of "expense" by "outlay or expense", s. 12(1)(x)(iv) was not limited to reimbursements of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | 37 |
11 May 1990 Memorandum (October 1990 Access Letter, ¶1494)
The one-time transitional credit for small businesses provided under s. 346 of the Excise Tax Act will be taxable under s. 12(1)(x).
30 May 1990 T.I. (October 1990 Access Letter, ¶1459)
Where an amount of assistance falls within both ss.12(1)(x) and 37(1)(b), the latter will prevail.
5 February 1990 T.I. (July 1990 Access Letter, ¶1318)
Where a Canadian parent makes a contribution of capital to its wholly-owned subsidiary corporation to fund capital expenditures on SR&ED, the...
5 January 1990 T.I. (June 1990 Access Letter, ¶1252)
Instead of requiring the inclusion in income of payments which grape farmers received from the Department of Agriculture to remove grapes from...
3 January 1990 T.I. (June 1990 Access Letter, ¶1253)
Amounts of government assistance which decrease the cost of property pursuant to s. 53(2)(k) do not have to be included in the taxpayer's income...
89 C.M.TC - "Leasing Costs" - "Application of Paragraph 12(1)(x) of the Act to the Tenant"
s. 12(1)(x) is not generally applicable to interest-free loans provided that the loan is unconditionally repayable. "It is possible that GAAR...
88 C.R. - Q.16
Where a limited partner receives a cash flow grant from the developer if the cash flow received by him from the partnership is insufficient to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.2) - Paragraph 96(2.2)(d) | 39 |
88 C.R. - Q.46
Where an interest-free loan is provided to an investor in a real estate project which is forgivable to the extent that a guaranteed cash flow...
87 C.R. - Q.17
S.12(1)(x) will not have application solely by virtue of a loan provided as an inducement being made at lower than a commercial rate of interest,...
86 C.R. - Q.8
Minor adjustments to an agreement in writing entered into before May 23, 1985 should not cause an inducement received after May 22, 1985 to be...
86 C.R. - Q.9
A tax credit is "received" for purposes of s. 12(1)(x) when the tax instalments required to be made by the taxpayer are reduced, and otherwise at...
86 C.R. - Q.10
The B.C. venture capital tax credit is not included in income.
Articles
Lewin, "Tax Treatment of Lease Inducement and At-Risk Rules and the New Limited Recourse Debt Rules", 1995 Corporate Management Tax Conference Report, c. 5.
Carr, "Lease Inducement Payments", 1993 Conference Report, C. 32.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 0 |
Subparagraph 12(1)(x)(iii)
Administrative Policy
14 November 2007 Internal T.I. 2007-0254601I7 F - Paiement incitatif - Bon de souscription
As part of transactions for a sale of a business of Aco to a purchaser (Bco) for a cash sale price, and the entering into of an agreement for the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 52 - Subsection 52(1) | value of share purchase warrant included in recipient’s income under s. 12(1)(x) increased ACB of warrant | 91 |
18 July 2006 Internal T.I. 2006-0184431I7 F - Prêt d'un gouvernement
In finding that a participating loan to the taxpayer (Xco) was not a forgivable loan, the Directorate stated:
[T]he [Loan] Agreement states that...
Subparagraph 12(1)(x)(iv)
Administrative Policy
7 October 2020 APFF Roundtable Q. 18, 2020-0862931C6 F - 12(1)(x) and CEBA
In commenting on the consequences of a corporation receiving a $40,000 loan under the Canada Emergency Business Account (“CEBA”) program, CRA...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(hh) | the parties can agree to allocate late CEBA loan repayments between the forgivable and non-forgivable loan components | 374 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(2.2) can be applied to non-deductible expenses/consequences of CEBA loan not being forgiven | 271 |
10 November 2020 External T.I. 2020-0861461E5 - TI – Tax Treatment of Loan Forgiveness under CEBA
The Canada Emergency Business Account (“CEBA”) provides interest-free loans of up to $40,000 to small businesses and not-for-profit...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s.12(2.2) election can be made re s. 12(1)(x)(iv) inclusion for forgivable CEBA loan | 146 |
20 May 2014 External T.I. 2013-0516121E5 F - Debt forgiveness
A compromise by Aco under Division I of Part III of the Bankruptcy and Insolvency Act resulted in reassessments owing by Aco for unremitted GST...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(1)(x)(iv) inclusion from BIA settlement of GST interest and penalties could be offset against related expense | 157 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(26) | unremitted GST and QST were not obligation "issued" by debtor | 102 |
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Commercial Debt Obligation | BIA settlement of unremitted GST interest | 127 |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | BIA settlement of unremitted GST on sales was on capital account | 82 |
20 November 2012 External T.I. 2012-0440031E5 F - Quebec Tax Credit for Production of Performances
Must the Québec Credit for the Production of Performances ("QCPP"), which is provided by Revenu Québec respecting qualifying expenditures of a...
8 December 2010 External T.I. 2010-0375921E5 - Subsection 20(24)
Where no s. 20(24) election was made in the situation where the vendor of a business has paid a purchaser to assume its deferred revenue...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) | income to both vendor and purchaser if no election/payment by set-off/no prescribed form | 131 |
19 May 2010 External T.I. 2010-0364761E5 F - Beneficiary not taxed on Part XII.4 tax credit
Corporation A, which has a sanitary landfill site and must annually fund an qualifying environmental trust to provide a fund for the post-closure...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127.41 - Subsection 127.41(1) | Pt XII.4 tax credit is received by the taxpayer respecting Pt XII.4 tax paid by the QET | 119 |
8 October 2004 APFF Roundtable Q. 34, 2004-0087021C6 F - Remboursement de frais de financement
Would s. 12(1)(x) apply in a situation where a corporation (the "Borrower") incurred financing expenses in connection with money that was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e) | 66 |
IT-273R2, "Government Assistance - General Comments," para. 15
Timing of recceipt of benefit of tax credit
¶ 17. Federal and provincial tax credits and deductions from tax which are in the nature of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | 18 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.4) | 18 | |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(2.1) | 116 |
Articles
Gregory M. Johnson, Wesley R. Novotny, "An Update on Flow-through Shares in the Energy Sector", 2016 Conference Report (Canadian Tax Foundation),12:1-39
Inclusion of flow-through share indemnity payment under s. 12(1)(x)(iv) and deduction under s. 12(2) as “outlay" (p.12:28-29)
...The CRA's view...
Subparagraph 12(1)(x)(v)
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...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(2.1) | ss. 13(7.4) and 53(2.1) elections unavailable re acquired rental property for cashback received from mortgage lender to offset high interest rate | 198 |
| 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 |
Subparagraph 12(1)(x)(vi)
Administrative Policy
16 February 2024 External T.I. 2023-0984301E5 - Code 5 - Reducing inclusion under para 12(1)(x)
Aco will receive a grant (the “Government Assistance”), described under s. 12(1)(x)(iv), from a Crown corporation for the purpose of creating...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | s. 13(7.1) applied automatically in priority to s. 12(1)(x) (or 13(7.4), if election) re government assistance for constructing or refurbishing accommodation | 207 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(2.2) election can be made for statutory deductions or amounts deductible under s. 9 in respect of affordable housing project | 173 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | cost of building includes cost of construction but not statutory deductions or amounts deductible under s. 9 | 73 |
28 June 2010 External T.I. 2009-0350241E5 F - Crédit d'impôt pour investissement du Québec
Is the Quebec investment tax credit an inducement payment required to be included in income under s. 12(1)(x), or is it applied to the cost of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) - Paragraph 13(7.1)(f) | Quebec investment tax credit reduces capital cost at end of year for which it is claimed, excepting any carryforward portion | 213 |
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | Quebec investment tax credit is government assistance | 46 |
Subpargraph 12(1)(x)(viii)
See Also
Ritchie v. The Queen, 2018 TCC 113
The taxpayer, who rented his farm to a corporation controlled by him, received an early “signing bonus” of $255,790 from Enbridge for entering...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) | signing bonus assimilated to proceeds under the signed contract | 113 |
Administrative Policy
16 May 2005 Internal T.I. 2005-0119061I7 F - Montant d'aide-actions
Prod Co, a wholly owned subsidiary of M Co and a "qualified corporation," produces a Canadian film or video production ("CFVP") at a cost of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| 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 |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) | subscription for shares of sub at overvalue constitutes a contribution of capital, generating a s. 53(1)(c) basis bump | 80 |
Paragraph 12(1)(y)
Administrative Policy
10 May 2001 Internal T.I. 2001-0065727 F - AVANTAGE - FONCTIONNEMENT AUTOMOBILE
Although s. 12(1)(y) does not deal with this, s. 6(1)(l) “allows a benefit relating to the operation of an automobile to be included in the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(l) | s. 6(1)(l) can include a benefit relating to the operation of an automobile in the income of an employee of a member of a partnership | 140 |
Paragraph 12(1)(x.2)
Administrative Policy
21 March 2006 External T.I. 2005-0158451E5 F - Québec Mining Duties Act - Credit for Losses
S. 32 of the Quebec Mining Duties Act (MDA) provided a credit to an operator equal generally to an amount not exceeding 12% of the lesser of (i)...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Cumulative Canadian exploration expense - Element J | credit under the Quebec Mining Duties Act based on exploration and development losses of operator was not “assistance" under J | 207 |
| Tax Topics - Income Tax Act - Section 66 - Subsection 66(12.6) - Paragraph 66(12.6)(a) | credit under the Quebec Mining Duties Act based on exploration and development losses of operator was too remote from the exploration to reduce the renounced CEE | 211 |
Paragraph 12(1)(z.7)
Articles
Joint Committee, "Foreign Affiliate Dumping, Derivative Forward Agreement and Transfer Pricing Amendments Announced in the 2019 Federal Budget", 24 May 2019 Submission of the Joint Committee
- The appropriate consequence of failing to meet the commercial transaction exception solely as a result of the new limitation is that only the...