An executor can elect under subsection 159(5) to pay the tax owing under 70(2) (rights and things) and 70(5) and (5.2) (the deemed disposition on death). The election form (T2075) must be filed twice, once with the terminal return and…
Trusts and acquisitions of control
The CRA was asked to consider a situation where a trust owns all of the issued shares of a corporation. Would there be an acquisition of control in the following scenarios? The CRA reponse is given in all capitals. (a)…
104(21) and 104(21.2) Interaction
Suppose a trust has gains that can be sheltered with the capital gain exemption and gains that cannot. In that case, it will be impossible to allocate all of the eligible gains to one beneficiary because of the formula in…
The CRA and ‘reasonableness’
The taxpayer in Howard v Canada (Attorney General), 2022 FC 1673, over-contributed to her TFSA. The CRA denied her request for relief on the basis that she had not made a “reasonable error” when she relied on advice from her…
Tax problems for Canadians who die owning foreign real property
If a Canadian sells foreign real property with an accrued gain, he or she should be able to claim a foreign tax credit in Canada for the foreign taxes paid. The same is not true if the Canadian dies owning…
Installments case
Gagnon v R, 2022 TCC 139 (informal procedure), provides a good review of the provisions of the Act, and related case law, that govern whether interest and penalties are payable by an individual who fails to remit installments in a…
Directors must prevent, not correct
In Donaldson v R, 2022 TCC 159, the former director of an invsolvent corporation argued that he had been duly diligent and was not liable for the unremitted source deductions of the corporation. He had met regularly with the CRA…
The “pursuit of profit”
In Brown v R, 2022 FCA 200, the Court overturned the judgment of the Tax Court, which had found that the taxpayer, a lawyer, undertook the management of an art gallery for a personal purpose: he began managing the gallery…
New OBCA shareholder register
New rules in the Business Corporations Act (Ontario) will require every corporation governed by the Act to maintain a register providing details on all individuals who have “significant control” over the corporations. Torys has a good summary of the requirements,…
Substantive CCPCs
A definition of “substantive CCPC” will be added to subsection 248(1). A private corporation (other than a CCPC) will be a substantive CCPC if it is controlled, directly or indirectly in any manner whatever, by one or more Canadian resident…