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…
T1135 work
Some tax preparers are reporting that brokerage statements are often inadequate for the purposes of preparing T1135s. An accountant told me that it often takes as long to prepare the T1135 as it does the T1 to which it relates.…
256(6) and Indemnities
According to CRA technical interpretation 2015-0565741E5, subsection 256(6) will not save the CCPC status of a corporation whose shares are pledged to secure an indemnity. The CRA concluded that an indemnity is not a debt for the purposes of the…
More T1135 paperwork
You file your T1135 for a taxation, and for your trouble the CRA responds with a questionnaire about one of the investments shown on the form. The questionnaire requires the following information (which I have taken almost verbatim from the questionnaire itself):
Notes on Shares of a Specified Class
In applying the association rules in subsection 256(1) of the Income Tax Act (Canada), one can ignore shares of a specified class as defined in subsection 256(1.1). The CRA has said the following about that definition. Regarding the requirements in…
55(5)(f) designations are unnecessary?
Neal Armstrong reports on the CRA pronouncement regarding 55(5)(f) designations at the 2014 STEP Roundtable: CRA stated that its long-standing practice “is to apply subsection 55(2) only to the excess of the taxable dividend paid on a share over the…
CRA Duty of Care?
In Scheuer v R, 2015 FC 74, Mr Justice Diner dismissed an appeal from an order of a prothonotary in which he dismissed a motion to strike a statement of claim against the CRA for failing to warn taxpayers adequately about a particular donation tax shelter. The Court agreed that the duty alleged is novel, but it is not “plain and obvious” that a claim based on the duty will fail.
Officially induced error
The CBC is reporting that “ne of every four business callers who ask for tax help from the Canada Revenue Agency’s call centres gets bad information, an internal survey suggests.” I don’t find this finding surprising, but the moral of…
Backdating trusts
In Al-Hossain v R, 2014 TCC 379, the Court wrote: The creation of a trust must be properly documented containing the requisite elements of a trust, dated, signed and in existence prior to or contemporaneous with the matter that is…
Rulings Directorate pre-rulings consultation program
From the Toronto Centre Canada Revenue Agency & Professionals Group Newsletter, Vol. 13: Issue 4, December 2014, which you can access through Tax Interpretations here: The Income Tax Rulings Directorate (ITRD) is offering, as a one-year pilot project, a new…