The authors recommend erring on the side of caution and treating cryptocurrency as foreign property for the purposes of T1135 reporting because the situs of cryptocurrency is uncertain. Musani and Singh “Foreign Property Reporting: Where Is Your Crypto?” 21:4 Tax…
84(2) catches a hybrid transaction
In Foix c R, 2021 CCI 52, W4N sold its key business assets to EMC, an American corporation. Before and after the asset sale, the shareholders of W4N sold its shares (directly and indirectly) to a Canadian subsidiary of EMC…
Bresse Syndics Inc.: De Jure Versus De Facto Control
In Bresse Syndics Inc. v R, 2021 FCA 115, the Court was asked whether “New CO2” was a CCPC. Its sole shareholder was a trust whose trustees, legally, had to be directors of a public corporation (with whom New CO2…
Are persons related to themselves?
When are persons related for the purposes of subparagraph 110.6(14)(c)(ii)? A person is not generally deemed to be related to himself except for certain purposes (paragraph 251(5)(c), subparagraph 55(5)(e)(ii), subsection 256(1.5) and determining whether corporations are associated). Compare this to…
Insurance tracking share
The CRA appears to accept that the cash surrender value (CSV) of a life policy held by a corporation can be allocated to a special tracking share (and not other issued shares of the corporation) for the purposes of 70(5),…
CRA and relationship breakdowns
My very first butterfly was undertaken pursuant to 55(3)(a) for a couple who were divorcing after many years of marriage. I recall looking carefully at whether their divorce would be treated as part of the series of transactions that included…
C-208 caution
Allan Lanthier has written about how C-208 provides opportunities for abusive surplus stripping that tax professionals have only dreamed about. He has updated his post, however, to point out that the Federal Court of Appeal’s recent decision in R v…
Sidecar structure fail
In Nicole L. Tiessen Interior Design Ltd. v R, 2021 TCC 29, the court considered the following circumstances. A firm of architects carried on business through a single corporation. In 2010 and 2011, the firm undertook a reorganization that saw…
Trusts and the exemption holding period test
The authors use some examples to illustrate the application of the deeming rules in subparagraph 110.6(14)(c) that apply to trusts. Example 1 Mr X incorporates Opco in 2015. He settles a family for himself and his family on February 23,…
Maybe the AAII grind isn’t so bad after all
The adjusted aggregate investment income (AAII) grind might not be the end of the world, especially in Ontario (which did not adopt the grind), because of the lower rate paid by an individual when funds are withdrawn from the corporation…