A CCPC might want to assign a portion of is small business deduction limit to another corporation because of the specified corporate income rules. The assignment will be problematic, however, if the assignor’s year-end occurs before that of the assignee. The assignor will not know the amount of the income earned by it from the assignee, and so the assignor will not know how much limit to assign. An excessive assignment might invalidate it. (Will an assignment be invalidated if a reassessment of the assignee reduces the income earned from the assignor?) Will amending returns help? Perhaps, but it will be a compliance nuisance.
Dino Infanti “Assignment of Small Business Limit Creates Filing Headaches” 18:1 Tax for the Owner-Manager (January 2018)
Postscript February 6, 2018: See also Tanya Budd and Trent Robinson, “Specified Corporate Income When Year-Ends Differ” 8:1 Canadian Tax Focus (February 2018).
