In Gaumond v R, 2014 TCC 339, an informal procedure case, the taxpayer, as part of a proposal under the Bankruptcy and Insolvency Act, forgave a debt owed to him by a CCPC he controlled. The Tax Court denied the…
No late-filed eligible dividend designations
Opco pays a dividend in year One, but it doesn’t believe it has any GRIP at that time, and so no eligible dividend designation is made in respect of the dividend. The CRA later reassesses Opco, and one of the…
New trust rules
Natalie Woodbury, “Testamentary Trusts: The New Rules” (2015) 63:1 Canadian Tax Journal 269-89 is a clear summary of the new rules relating to testamentary trusts and life-interest trusts. The author asks whether the new rules will lead to an increased…
The CRA on crowdfunding
From technical interpretation 2015-0579031I7: Depending on the facts and circumstances, monies received by a taxpayer under a crowdfunding arrangement could represent a loan, capital contribution, gift, income, or a combination thereof. However, since the terms and conditions of these types…
Variation not retroactive
One of the beneficiaries of a 1995 trust, the settlor’s daughter-in-law, died unexpectedly in 2009. The settlor’s son was also a beneficiary of the trust but only for capital. He purported to begin taking income in 2009 anyway. The settlor…
GAAP working papers
BP Canada Energy Company, for its audited financial statements under GAAP, had to “calculate reserves to account for contingent tax liabilities. Those calculations include an estimate of the liability BP would face if the Minister were to challenge…
55(2) Changes
Finance is proposing to amend 55(2) and related provisions for dividends paid after April 20, 2015. 55(2) will contain two new purpose tests. A dividend (other than an 84(3) dividend) might be caught under the new rules if one of…
TCC and FCA odds
From H.M. Dolson, “What To Expect in Tax Adjudication”, Canadian Tax Highlights 23:4 (April 2015): As a whole, a general procedure taxpayer represented by counsel achieved a meaningful victory in 38.5 percent of the published TCC decisions and…
Partnership winding-up
Subsection 85(3) requires that a partnership be wound-up within 60 days after the disposition of property to a corporation under subsection 85(2). The CRA accepts that a partnership has been wound up even if the legal title to real property…
Spousal rollover denied
In Murphy Estate v R, 2015 TCC 8, the Tax Court denied the spousal rollover where a consent order issued in the family law context seemed to provide for the transfer of the RRSP to the spouse from the children…