Cases
Ollenberger v. Canada, 2013 DTC 5064 [at at 5863], 2013 FCA 74
The taxpayer was entitled to recognize a business investment loss on a loan owing to him by a Canadian-controlled private corporation ("AES")...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Active Business | 116 | |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | 116 |
Weaver v. Canada, 2008 DTC 6517, 2008 FCA 238
The taxpayers each owned 25% of the shares of a Canadian-controlled private corporation that leased manufactured homes on Indian-reserve lands...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business | rent from trailer park now only income source | 181 |
| Tax Topics - General Concepts - Ownership | beneficial ownership can be transferred orally before date of written agreement | 129 |
| Tax Topics - General Concepts - Agency | business activeness can be attributable to an agent | 181 |
Boulanger v. HMQ-Canada, 2004 DTC 6192, 2003 FCA 332
A corporation's only assets since 1992 had comprised a vacant property and a sum owing for the sale of one-half of another property that...
Hudon v. Canada, 2001 DTC 5630, 2001 FCA 320
In the years in question a corporation ("Hall River") which owned forest concessions and rights to develop the hydro electric potential of a river...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | start-up negotiations | 129 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | framework negotiations were engaging in a business | 95 |
See Also
Hébert v. The Queen, 2018 TCC 48
The market for the business of a corporation (“Radio Progressive “) of the taxpayer (Mr. Hébert) of selling and repairing radio...
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| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | 147 | |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | attempted sale of assets previously used in an active business represented the continued carrying on of that business | 83 |
McDowell v. The Queen, 2012 DTC 1206 [at at 3553], 2012 TCC 244
The taxpayer made a $1.15 million loan in 2002 to a corporation that was wholly owned by her spouse. The corporation had not conducted any...
Borys v. The Queen, 2005 DTC 1069, 2005 TCC 397
Before going on to find that the taxpayer had provided evidence that amounted to a prima facie case that a loss realized by it on a debt owing to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Onus | 61 | |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | 112 |
Martel v. The Queen, 2003 DTC 1187 (TCC)
The assets of a Canadian-controlled private corporation ("Gestion") consisted of the shares of two companies, the first of which ("2321") was...
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| Tax Topics - General Concepts - Corporate/Separate Personality | 65 | |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | 134 |
Klein v. The Queen, 2001 DTC 443 (TCC)
Lamarre T.C.J. rejected a submission that a corporation ceased to be a small business corporation when a receiver-manager was appointed by the...
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| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | debt of partnership is owed by partners | 171 |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) | debt of common law partnership is owed by its partners | 118 |
Vogel v. The Queen, 96 DTC 1321 (TCC)
A corporation which previously had earned income from commissions by negotiating contracts for various commodities and that prior to the taxation...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | 96 |
Benson v. Third Canadian Investment Trust Ltd. (1993), 14 OR (3d.) 493 (Ont. Ct. (G.D.))
Farley J. found that the sale pursuant to a share exchange offer for the direct and indirect shareholding of a closed-end investment company...
Balz Estate v. MNR, 92 DTC 1472, [1992] 1 CTC 2332 (TCC)
A promissory note held by the subsidiary of a holding company, which had been received as consideration for the disposition of its business...
Administrative Policy
13 April 2023 External T.I. 2017-0684341E5 F - Perte au titre d’un placement d’entreprise
An individual owned an interest-bearing debt of a wholly-owned corporation operating a restaurant which in 20X1 sued the franchisor at the same...
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| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | active business for SBC purposes can continue after regular business operations have ceased/ sale of debt for $1 to unrelated purchasers might be a non-arm’s length transaction | 318 |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | sale of debt for $1 in order to trigger a loss might be a NAL transaction | 150 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | business does not cease until the prior commitments incurred in the course of the business are fulfilled | 136 |
25 January 2018 External T.I. 2017-0717561E5 - specified small business corporation
CRA set out general guidelines on when cash held by a corporation would be considered to be used in an active business carried on by it for...
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| Tax Topics - Income Tax Regulations - Regulation 4901 - Subsection 4901(2) - Specified Small Business Corporation | guidelines on when cash is used in an active business | 296 |
7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 9, 2016-0651801C6 F - Assurance-vie à assurés multiples-110.6(15)
S. 110.6(15)(a) provides that a shareholder’s shares are to be valued for various listed purposes including the “small business corporation”...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(15) - Paragraph 110.6(15)(a) | corporate-owned policy is valued at CSV even if non-shareholder lives are included | 197 |
7 October 2016 APFF Roundtable Q. 11, 2016-0652941C6 F - Contrat de location / Capital lease
Is the asset recorded in the financial statements as a capital lease considered as an asset used in an active business for purposes of the...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | stipulated rights of lessee should be valued for QSBCS purposes | 95 |
S4-F8-C1 - Business Investment Losses
1.15 For income tax purposes, the term all or substantially all is understood to mean at least 90%, and the terms principally and primarily to...
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| Tax Topics - Income Tax Act - Section 50 - Subsection 50(1) | End of year references taxpayer | 343 |
| Tax Topics - Income Tax Act - Section 50 - Subsection 50(1.1) | 247 | |
| Tax Topics - Income Tax Act - Section 50 - Subsection 50(1) - Paragraph 50(1)(a) | Proactive collection efforts | 157 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(ii) | connection between loan and income-producing purpose | 320 |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(9) | Example | 182 |
| Tax Topics - Income Tax Act - Section 164 - Subsection 164(6) | Limitation on BIL carryback | 96 |
6 March 2015 Internal T.I. 2014-0549761I7 - Internally generated goodwill & excluded property
Before going on to indicate that internally generated goodwill is considered in determining whether shares of a foreign affiliate of a corporation...
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| Tax Topics - Income Tax Act - Section 149 - Subsection 149(10) | unpurchased goodwill is taken into account | 96 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Excluded Property | unpurchased goodwill is taken into account | 207 |
11 October 2013 Roundtable, 2013-0499671C6 F - Actif d'impôts futurs / Future income tax assets
Is a future income tax asset an asset used in an active business for the purposes of the definition of qualified small business corporation share...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (c) - Subparagraph (c)(i) | future income tax asset is not an asset/tax receivable can be used in an active business | 114 |
11 October 2013 APFF Roundtable, 2013-0495631C6 F - Actions admissibles de petites entreprises
Must the 90% level always be attained before the "substantially all" test is satisfied? CRA stated:
According to the jurisprudence, the...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | failure to satisfy the 50% test for even a moment in time will disqualify | 135 |
17 July 2013 External T.I. 2012-0473261E5 F - Actif d'impôts futurs / Future income tax assets
Is a future income tax asset an asset that is used principally in an active business carried on in Canada for purposes of the "qualified small...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | future (or deferred) income tax asset is not an asset until it becomes receivable, whereupon it may be attributable to active business | 245 |
14 March 2013 External T.I. 2013-0473981E5 F - JVM d'une police d'assurance-vie - SEPE
A corporation is the holder of a life insurance policy on its shareholder (Mr. X, who has an incurable illness) with a nil cost, a cash surrender...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(15) - Paragraph 110.6(15)(a) - Subparagraph 110.6(15)(a)(ii) | proceeds of corporate life insurance policy in excess of CSV ignored for SBC purposes | 299 |
5 October 2012 APFF Roundtable, 2012-0453991C6 F - Action admissible de petite entreprise
The query referred to Ville de Laval c. Polyclinique médicale Fabreville, s.e.c., 2007 QCCA 426 and Ferme CGR enr., s.e.n.c. (Syndic de), 2010...
13 June 2012 Internal T.I. 2012-0435351I7 F - SEPE - chèques en circulation
In order to qualify as a SBC, Opco issued cheques to various suppliers. Do the issued and outstanding cheques, that have not yet been cashed,...
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| Tax Topics - General Concepts - Payment & Receipt | in Quebec, payment by cheque does not occur until debiting of bank account | 130 |
13 June 2012 External T.I. 2012-0435351E5 F
Cheques issued by Opco but not yet cashed would not reduce its cash on hand given that under the applicable law (the Quebec Civil Code), the...
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| Tax Topics - General Concepts - Payment & Receipt | issuance of cheque not payment | 48 |
27 March 2012 External T.I. 2012-0435101E5 - Small Business Corporation
The deeming under s. 129(6) of property income to be active business income does not apply for purposes of the small business corporation...
11 July 2006 External T.I. 2005-0152031E5 F - Actions admissibles de petite entreprise
A couple will transfer a co-owned building – that is used 75% in the operation of an active business of a corporation owned by one of them and...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(7) - Paragraph 110.6(7)(b) | transfer of property to corporation for a s. 85 agreed amount less than FMV of the property and the shares issued therefor does not engage s. 110.6(7)(b) | 259 |
7 October 2005 Roundtable, 2005-0141021C6 F - Actions admissibles de petite entreprise
Mr. A and Ms. B, who deal with each other at arm's length, have held 50% each of the shares of Opco and of Realtyco for over 24 months. All of the...
5 February 2003 External T.I. 2002-0157445 F - AAPE ACTION ADM PETITE ENTREPRISE
Regarding whether a corporation engaged in a business of trading listed shares qualified as an SBC, CCRA stated:
[T]he holding or use of an asset...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (c) | question of fact whether shares of stock-trading corporation were QSBCs | 26 |
1 March 2002 External T.I. 2001-0095115 F - ACTIF UTILISE PRINCIPALLEMENT-SEPE
44% of the floor area of a building owned by Holdco is used in the grocery operations of its wholly-owned subsidiary (Opco) and the balance is...
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| Tax Topics - Income Tax Act - Section 129 - Subsection 129(6) | interposition of 3rd-party franchisor between lessor and active-business wholly-owned tenant precluded application of s. 129(6) | 73 |
8 January 2002 External T.I. 2001-0096005 - BAD DEBTS AND CARRYING ON A BUSINESS
The fact that an asset is a trade receivable does not, by itself, indicate that it is used principally in an active business. Although trade...
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| Tax Topics - Income Tax Act - Section 50 - Subsection 50(1) | 42 |
16 March 1998 External T.I. 9606355 - ASSETS USED IN AN ACTIVE BUSINESS
Where a portion of a lot is more than physically necessary to carry on a business and cannot be disposed because of zoning restrictions or because...
4 July 1997 External T.I. 9636835 - QSBCS - INTEREST IN A PARTNERSHIP
In response to a question, respecting a corporation which holds only an interest in a partnership, whether the shares of such corporation can...
22 October 1996 External T.I. 9630315 - SBC - ONLY ASSET INTEREST IN A PARTNERSHIP
"... It is still Revenue Canada's view that a Canadian-controlled private corporation whose only asset is an interest in a partnership, where or...
26 July 1995 External T.I. 9514695 - ACTIVE BUSINESS ASSETS - SECURITY FOR LOAN
"Where a financing arrangement that is fundamental to the business operations requires certain security to be maintained and it is reasonable to...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Income of the Corporation for the Year From an Active Business | 76 |
31 March 1995 External T.I. 9501105 - MORTGAGE RECEIVABLE - ACTIVE BUSINESS ASSET
"... Although a mortgage is an asset whose existence may be relevant to the equity of a corporation, it is not generally an asset used in an...
31 March 1995 External T.I. 9501215 - SMALL BUSINESS CORPORATION - XXXXXXXXXX
"It is our opinion that normally a full-service motel operation would be providing a sufficient level of services such that it would not be...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business | motel but not trailer campsite a non-property business | 98 |
25 October 1994 External T.I. 9425835 - SBC USE OF RELESTATE AS CO-TENANT
Under a co-ownership arrangement, each co-tenant has a right to occupy the property in respect of all its areas and neither party can point to a...
24 October 1994 External T.I. 9424555 - PARTNERSHIP - GENERAL
The policy that where a corporation has a partnership interest, it is the underlying partnership assets (to the extent of the corporation's...
9 July 2007 External T.I. 2006-0200791E5 F - Actions sous entiercement
A private-company franchisee is required to hold shares of a public corporation under an escrow agreement under which it is prohibited from...
21 July 1994 External T.I. 9405005 - ACTIVE BUSINESS ASSET - INTERCORPORATE ADVANCES
Intercorporate accounts receivable arising as a result of the leasing of equipment and the provision of administrative services by one corporation...
21 July 1994 External T.I. 9409825 - SMALL BUSINESS CORPORATION - DEFINITION
Re wether a corporation that provides management services to a related professional practice is carrying on a business.
4 February 1994 External T.I. 9325245 F - Small Business Corp
Assets used principally in the active business of a limited partnership will be considered to be used in an active business by the corporate...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business | 38 |
1993 A.P.F.F. Round Table, Q. 22
Assets which "are not directly used in the active business carried on by the corporation because of unfavourable market conditions could...
93 C.R. - Q. 45
Generally, loans to employees who are not shareholders of the corporation, to acquire shares, a house, or an automobile, will be considered to be...
11 May 1993 External T.I. 9302225 F - Active Business Carried on in Canada
"As a general rule a business that involves the sale or leasing of goods is usually carried on in the country where the corporation is resident,...
5 April 1993 T.I. (Tax Window, No. 30, p. 19, ¶2494)
Shares which a franchisee is required to purchase in the franchisor in order to provide security in respect of trade payables which it owes to the...
9 February 1993 T.I. (Tax Window, No. 29, p. 3 ¶2436)
Mortgages taken back by a developer in order to facilitate sales may initially be assets used in an active business, but will become investments...
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | 33 |
3 February 1993 T.I. (Tax Window, No. 28, p. 14, ¶2415)
In order for land to be considered to be used in an active business, it generally must be subjacent to any building or structure affixed to the...
Tax Professionals Mini Round Table - Vancouver - Q. 34 (March 1993 Access Letter, p. 113)
Notwithstanding the decision in Bills Investments Ltd. v.First Investors Corp. Ltd. (1990), 72 DLR (4th) 32 at 45, the fair market value of a...
13 March 1992 T.I. (Tax Window, No. 18, p. 16, ¶1805)
Where one of the assets of a corporation is a partnership interest, the corporation's proportionate share of the fair market value of the...
17 February 1992 T.I. 920014 (March 1993 Access Letter p. 86, ¶C248-127; Tax Window, No. 16, p. 18, ¶1753)
If more than 50% of an asset is used in an active business, the asset will be considered to be used principally in an active business.
15 January 1992 T.I. (Tax Window, No. 15, p. 7, ¶1702)
Assets leased by a partnership for use in its active business will be considered to be used in an active business carried on by the corporate...
30 November 1991 Round Table (4M0462), Q. 11.6 - Eligible Assets (Receivable Dividend Refund) (C.T.O. September 1994)
A dividend refund amount receivable by a corporation constitutes an eligible asset.
30 November 1991 Round Table (4M0462), Q. 11.5 - Small Business Corporation (Purchase and Sale of Vacant Land) (C.T.O. September 1994)
A corporation in the business of buying and selling vacant land generally will qualify as a small business corporation as long as the vacant land...
30 November 1991 Round Table (4M0462), Q. 11.4 - Small Business (Term Deposit) (C.T.O. September 1994)
Where a corporation's fees under service contracts are paid in advance and such funds are invested in term deposits, the term deposits could be...
16 September 1991 TI (Tax Window, No. 9, p. 9, ¶1451)
An unsecured non-interest bearing loan with no specific terms of repayment would qualify under the concept of "indebtedness" introduced by S.C....
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| Tax Topics - General Concepts - Effective Date | 34 | |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | 29 |
8 May 1991 T.I. (Tax Window, No. 3, p. 32, ¶1248)
Where a corporation earns interest income from cyclical cash and short-term investments and the interest is included in its active business...
25 and 28 March 1991 T.I. (Tax Window, No. 1, p. 5, ¶1178)
Where the only assets of Holdco are shares of its wholly-owned subsidiary which carries on an active business in Canada and more than 10% of whose...
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| Tax Topics - Income Tax Act - Section 186 - Subsection 186(4) | 11 |
23 January 1991 T.I. (Tax Window, Prelim. No. 3, p. 24, ¶1103)
Where a corporation sells its business for cash, it has ceased to carry on an active business as of the date of the sale even if the cash proceeds...
5 June 1990 T.I. (November 1990 Access Letter, ¶1536)
Where a corporation sells land and building used in a division of its active business and takes back a mortgage from the purchaser, the mortgage...
5 June 2001 External T.I. 2000-0055765 F - Revenu gagné en main
An Opco whose shares, being common shares, are equally owned by two individuals (A and B) engages in a purification transaction (to qualify as a...
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| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) | s. 85(1) exchange of common shares for preferred shares transferred the safe income on hand to the pref | 214 |
5 June 1990 T.I. (November 1990 Access Letter, ¶1527)
Where Opco and Realco are connected CCPCs and the real estate assets of Realco are leased to Opco, the shares of Realco and of Opco will...
1 March 1990 T.I. (August 1990 Access Letter, ¶1391)
Where the proceeds of a life insurance policy held by a corporation on the life of its shareholder will be distributed by the corporation as a...
23 February 1990 T.I. (July 1990 Access Letter, ¶1347)
In the situation where a building was held in joint tenancy by an individual and a corporation owned by him, because no more than 50% of the...
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| Tax Topics - Income Tax Act - Section 54 - Principal Residence | 84 |
12 September 89 Memorandum (February 1990 Access Letter, ¶1128)
Where an asset such as the building is only partly used in an active business carried on primarily in Canada by a corporation, it would appear to...
October 1989 Revenue Canada Round Table - Q.13 (Jan. 90 Access Letter, ¶1075)
The concept of connected corporations for purposes of the definition of "small business corporations" in s. 248(1) and the definition of...
October 1989 Revenue Canada Round Table - Q.24 (Jan. 90 Access Letter, ¶1075)
A debt of a parent corporation held by its subsidiary will not be a "bond, debenture, bill, note, mortgage, hypothec or similar obligation" if it...
20 July 1989 T.I. (Dec. 89 Access Letter, ¶1066)
Where Mr. A and Mr. B conduct an active business through a partnership and Mr. A rolls his interest in the partnership into Holdco, which has no...
4 July 1989 T.I. (Dec. 89 Access Letter, ¶1051)
A corporation whose only assets are an interest in a limited partnership carrying on an active business and a loan to the partnership,...
88 C.R. - F.Q.32
The fair market value of a life insurance policy valued in accordance with normal valuation practices and IT-416R3, para. 4 and 5, will be taken...
86 C.R. - Q.51
a CCPC whose only asset was an interest in a partnership substantially all of whose assets were used in a Canadian active business, would qualify....
81 C.R. - Q.31
Since RC looks through a partnership interest to the underlying assets in applying the test, an interest in a partnership held by a corporate...