Kenneth Keung, “Anti-Intermediary Rules in Section 125” , Canadian Tax Highlights 25:2 (February 2017) provides a handy summary of the carve-outs from income eligible for the small business deduction (SBD) as follows: ABI earned from a partnership in which the…
Real property registry
I have written a brief article on the new-ish OBCA requirement to keep a register of interests in real property.
Price adjustment clauses per CRA
The following is my summary of a presentation on price adjustment clauses (PACs) given by Nicholas Correia, CRA, to the CICBV Annual Conference, June, 2017. My comments and questions are in brackets.
Spousal rollover busted
Mrs X dies leaving her common shares in the capital of Holdco to her husband. For some reason, the executors of her estate undertake a reorganization pursuant to s 86 of the Income Tax Act in which the common shares…
Clever planning
The Tax Court continues to be unimpressed by clever planning. Brian Arnold thinks that the current generation of tax judges is much more willing to apply the GAAR or other anti-avoidance rules to planning that reduces tax. Mady v R, 2017 TCC 112, is another case that supports his thesis.
Extension of time
A taxpayer fails to meet the 90-day deadline for filing an appeal to the Tax Court apparently because he was badly advised by a professional about procedural matters. Should the Court grant his application to late-file the appeal? The Federal Court of Appeal said ‘yes’ in Bygrave v R, 2017 FCA 124.
ASPE appraisal increments
I wrote here about the effect that ASPE could have on the retained earnings of a private corporation. An appraisal increment could render retained earnings a very poor indicator of safe income. The CRA is now saying that such an…
More s 55 nonsense
Tax Interpretations has translated a technical interpretation (2017-0683511E5) in which the CRA states that using a redemption of shares to avoid s. 55(2.1)(b) is potentially GAAR-able. I have another translation: the government needs to invoke GAAR to cooper up its…
Accommodation party
The Federal Court of Appeal has affirmed the Tax Court’s finding that an employee-controlled buyco acted as an “accommodation party” that allowed a key shareholder to use the capital gain exemption to strip out corporate surplus. As a result, section…
Election errors
In R & S Industries Inc. v R, 2017 TCC 75, both the CRA and the taxpayer agreed that they were bound by the elected amount shown on a T2059. That amount cannot be altered unless the CRA permits the…