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LPC Notes (page 6)

Director due diligence

Posted on: March 21, 2024 Last updated on: March 21, 2024 Written by: John Loukidelis
Jafarnia v R, 2023 TCC 171, restates a hard truth for directors of private corporations: you will not avoid liability for unremitted source deductions if you fail to remit them because you believe the business will turn around and money…
Continue reading “Director due diligence”…

Rectification post-Fairmont

Posted on: January 22, 2024 Last updated on: January 12, 2024 Written by: John Loukidelis
In Slightham et al. v. AGC, 2023 ONSC 6193 (which I also discuss here), the Court granted rectification of two trust deeds where the applicants were able to prove that the deeds did not accurately reflect the intentions of the…
Continue reading “Rectification post-Fairmont”…

55(3.01)(g) butterflies

Posted on: January 19, 2024 Last updated on: January 11, 2024 Written by: John Loukidelis
The authors describe a scenario where Aco and Bco own 85% and 15% respectively of Opco. Opco cannot spin-off its real property to Realco where Aco and Bco become direct 85/15 shareholders of Realco. 55(3)(a) will not apply because Bco…
Continue reading “55(3.01)(g) butterflies”…

Mandatory disclosure rules (MDR) – CRA guidance

Posted on: January 15, 2024 Last updated on: January 11, 2024 Written by: John Loukidelis
The authors provide notes on the CRA’s updated guidance on the MDR. Taxpayers must report a series of transactions that includes a notifiable transaction if the series straddles the date the transaction is designated as such. The CRA list of…
Continue reading “Mandatory disclosure rules (MDR) – CRA guidance”…

Scams and tax

Posted on: January 10, 2024 Last updated on: January 10, 2024 Written by: John Loukidelis
In an email spoofing attack, an employee of a business might share important financial information with, or send money to a, a fraudster because the employee has received an email from the fraudster masquerading as the employee’s boss. In a…
Continue reading “Scams and tax”…

Employee loans

Posted on: December 27, 2023 Last updated on: December 20, 2023 Written by: John Loukidelis
The CRA has published a document on its website about employee debt.
Continue reading “Employee loans”…

Deans Knight applied

Posted on: December 23, 2023 Last updated on: December 20, 2023 Written by: John Loukidelis
In R v. MMV Capital Partners Inc., 2023 FCA 234, the Court applied GAAR to a scheme where five of the original shareholders of the taxpayer maintained de jure control but an arm’s length party acquired 99% of the corporation’s…
Continue reading “Deans Knight applied”…

Rectification success

Posted on: December 20, 2023 Last updated on: December 20, 2023 Written by: John Loukidelis
In Slightham et al. v. AGC, 2023 ONSC 6193, the Court granted rectification of a trust deed that inadvertently prohibited the allocation of income derived from Opco to Holdco, which was a beneficiary of the trust. The parties had intended…
Continue reading “Rectification success”…

Sale of farmland

Posted on: December 4, 2023 Last updated on: November 27, 2023 Written by: John Loukidelis
The CRA confirmed that or purposes of the farming-use condition in clause 110.6(1.3)(a)(ii)(A), the person or individual that meets this condition need not be the person who owns the property at the determination time or in the 24 months immediately…
Continue reading “Sale of farmland”…

CDA addition for Benco

Posted on: December 4, 2023 Last updated on: November 27, 2023 Written by: John Loukidelis
A corporate beneficiary of a trust can add an amount to its CDA in respect of a capital gain realized by the trust only if the trust allocates the entire capital gain to the corporation. Moreover, the addition can only…
Continue reading “CDA addition for Benco”…
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Guest post on the DTC

The following article on the disability tax credit was written by Tanya O’Connell, a former law clerk at Loukidelis Professional Corporation. The Disability Tax Credit (DTC) The DTC is a personal tax credit available under section 118.3 of the Income…
Continue reading “Guest post on the DTC”…

Inter-company loans

Subsection 15(1) of the Income Tax Act could apply where Aco loans money to Bco and Bco has no means of repaying the money. On the other hand, subsection 246(1) will not apply where Bco and its shareholder have no…
Continue reading “Inter-company loans”…

Change in use and flipping

The CRA has confirmed that a deemed disposition under subsection 45(1) of the Income Tax Act resulting from a change in use is not a disposition for the purposes of the flipping rules in subsections 12(12) and 12(13). See 2024-1027831C6.
Continue reading “Change in use and flipping”…

Swiss bank account trouble

In Azmayesh-Fard v R, 2025 TCC 20, the Court considered whether the CRA had properly reassessed a taxpayer beyond the normal reassessment period and imposed gross negligence penalties for unreported income from a Swiss bank account and for failing to…
Continue reading “Swiss bank account trouble”…

Price adjustment clause

An accounting colleague has reported to me on a CRA audit involving a price adjustment clause. The CRA challenged the valuation used for a transfer of property. The taxpayer and the CRA eventually agreed on a valuation that was about…
Continue reading “Price adjustment clause”…

Recent Posts

Guest post on the DTC

The following article on the disability tax credit was written by Tanya O’Connell, a former law clerk at Loukidelis Professional Corporation. The Disability Tax Credit (DTC) The DTC is a personal tax credit available under section 118.3 of the Income…
Continue reading “Guest post on the DTC”…

Inter-company loans

Subsection 15(1) of the Income Tax Act could apply where Aco loans money to Bco and Bco has no means of repaying the money. On the other hand, subsection 246(1) will not apply where Bco and its shareholder have no…
Continue reading “Inter-company loans”…

Change in use and flipping

The CRA has confirmed that a deemed disposition under subsection 45(1) of the Income Tax Act resulting from a change in use is not a disposition for the purposes of the flipping rules in subsections 12(12) and 12(13). See 2024-1027831C6.
Continue reading “Change in use and flipping”…

Swiss bank account trouble

In Azmayesh-Fard v R, 2025 TCC 20, the Court considered whether the CRA had properly reassessed a taxpayer beyond the normal reassessment period and imposed gross negligence penalties for unreported income from a Swiss bank account and for failing to…
Continue reading “Swiss bank account trouble”…

Price adjustment clause

An accounting colleague has reported to me on a CRA audit involving a price adjustment clause. The CRA challenged the valuation used for a transfer of property. The taxpayer and the CRA eventually agreed on a valuation that was about…
Continue reading “Price adjustment clause”…

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Archives

Categories

Recent Posts

Guest post on the DTC

The following article on the disability tax credit was written by Tanya O’Connell, a former law clerk at Loukidelis Professional Corporation. The Disability Tax Credit (DTC) The DTC is a personal tax credit available under section 118.3 of the Income…
Continue reading “Guest post on the DTC”…

Inter-company loans

Subsection 15(1) of the Income Tax Act could apply where Aco loans money to Bco and Bco has no means of repaying the money. On the other hand, subsection 246(1) will not apply where Bco and its shareholder have no…
Continue reading “Inter-company loans”…

Change in use and flipping

The CRA has confirmed that a deemed disposition under subsection 45(1) of the Income Tax Act resulting from a change in use is not a disposition for the purposes of the flipping rules in subsections 12(12) and 12(13). See 2024-1027831C6.
Continue reading “Change in use and flipping”…

Swiss bank account trouble

In Azmayesh-Fard v R, 2025 TCC 20, the Court considered whether the CRA had properly reassessed a taxpayer beyond the normal reassessment period and imposed gross negligence penalties for unreported income from a Swiss bank account and for failing to…
Continue reading “Swiss bank account trouble”…

Price adjustment clause

An accounting colleague has reported to me on a CRA audit involving a price adjustment clause. The CRA challenged the valuation used for a transfer of property. The taxpayer and the CRA eventually agreed on a valuation that was about…
Continue reading “Price adjustment clause”…

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