In Groupe Honco inc. c R, 2012 CCI 305, the Tax Court applied the anti-avoidance rule in subsection 83(2.1) to a dividend purported to be paid from the capital dividend account of a corporation taken over by another so that…
No rectification necessary
In Twomey v R, 2012 TCC 310, the taxpayer thought he had been issued 100 Common Shares in the capital of a corporation, but the minute book indicated he had received only one. The difference mattered: whether the taxpayer could…
Late-filed
Here’s a good reason to file an election on time: if you don’t, and one of the parties to the election disappears (dies or is dissolved, for example), the CRA will likely take the position that a late-filed election isn’t possible because the parties to it can’t make the election anymore.
“Gambling with other people’s money”
In Deakin v R, 2012 TCC 270, the taxpayers had been assessed as directors for the failure of a corporation to remit income tax and GST source deductions. It appears that the taxpayers chose to have the corporation use what it had withheld to keep its business afloat rather than remit the money as required by the Income Tax Act (Canada) and the Excise Tax Act (Canada) (¶ 8).
ABIL
Jamie Golombek has written an interesting piece on a taxpayer who tried to claim an ABIL and was met with the usual CRA skepticism. The issue in dispute in the Tax Court appeal eventually resolved itself into whether a return…
Exemption trap
March 30 Update John Campbell, in a comment posted below, points out that paragraph 110.6(15)(b) likely provides an escape from the “trap” that I discuss below at least insofar that one is concerned about whether the shares of Holdco qualify for the exemption.
I was helping a fellow tax professional with a situation like the following where I think I almost stumbled into a trap relating to the $750,000 capital gain exemption.
55(2)-land
I didn’t understand CRA technical interpretation 2011-0394191 at first, but I think I get it now.
PC Employment Agreement
It is our standard practice when incorporating a professional corporation (a PC) to prepare an employment contract between the professional and the PC.
Buckingham
For those of us who defend director liability cases, R v Buckingham, 2011 FCA 142, is a must-read.
Resignation
The Ontario Ministry of Government Services (MGS), it appears, seems to believe that the sole director of a corporation cannot resign and leave the corporation without directors. The MGS will refuse to amend the public record for a corporation to show that it doesn’t have any directors if the sole director attempts to resign.