The following seems to capture the logic of the trust reporting rules, as amended by the August 12, 2024, draft legislation, including the rules that will apply to “bare trusts” for years ending after December 30, 2025. Is the arrangement…
2024 STEP Roundtable Part 2
In response to question 10, the CRA referred to Maurice Kissel Family Trust v R (unreported 2019-4092(IT)G). The trust in question prohibited the distribution of amounts to a “designated beneficiary”, but the trust purported to allocate and deduct gains it…
Trust allocations
Fiducie Historia c HMK, 2024 CCI 76 (French only), affirmed the validity of trust allocations made by trustees where, the CRA alleged, another agreement (entered into to preserve capital losses in a corporation controlled by the trust) seemed to give…
2024 STEP Roundtable
The following is based on the text published in Tax Topics 2713 (September 10, 2024). Question 1 – Spousal Trusts A spousal trust that receives a contribution of capital after the death of the spouse-beneficiary remains a spousal trust, but…
Dissolved trust year-end
At the 2024 CALU conference round table (question 12, addressed in 2024-1005851C6), the CRA confirmed that a bare trust has a December 31 year-end and that a trust (other than a GRE) that dissolves during a calendar year still has…
Making Trust Amounts Payable
The CRA has taken the position that a trust cannot deduct an amount made payable to a beneficiary under ITA subsection 104(6) unless, among other things, the trust was legally entitled to make the payment under the terms of its…
Residence of a trust
In Theodoros Darmos Family Trust v. Minister of Finance et al., 2023 ONSC 6431, the Court was called upon to determine whether two family trusts were resident in Alberta or Ontario. After conducting a detailed review of the relevant facts,…
Reporting the ID of disaster clause beneficiaries
At the STEP Canada 2023 Round Table, in answer to question 4, the CRA stated that a contingent beneficiary is a beneficiary for the purposes of subsection 204.2(2) of the Income Tax Regulations, which now requires trusts to provide identification…
Property of a trust that prevents the prevention of filing
At the STEP Canada 2023 Round Table, in answer to question 3, the CRA stated that a trust settled with a gold or silver bar, or a collectible coin, cannot satisfy the exception in paragraph 150(1.2)(b) of the Income Tax…
Forgotten capital losses
At the STEP Canada 2023 Round Table, in question 2, the CRA addressed a hypothetical question about the executors of an estate finding evidence of a capital loss realized years before that was not claimed. The CRA agreed that the…