Category: TOSI

A taxpayer can deduct an amount under paragraph 20(1)(ww) even if the taxpayer must include a taxable capital gain in income that is subject to TOSI but he or she can offset the gain with an allowable capital loss. STEP…

The CRA confirmed that multiple businesses run by a husband and wife where they work fewer than 20 hours per week in each business would not be “excluded businesses” under the “bright line test” for substantial involvement. The CRA wrote…

This articles review the interaction of the subsection 82(3) election and the TOSI rules. “n the CRA’s view, the correct method of applying the two provisions is to allocate receipt of the dividends in accordance with subsection 82(3) and then…

In technical interpretation 2019-0833181E5 (March 15, 2020), the CRA considered when the sale or licensing of digital products could be considered to generate income from a service for the purposes of the TOSI rules. According to the CRA, the download…

The TOSI rules don’t just apply to dividends from Canadian private corporations. The rules can apply to dividends from foreign private corporations as well, and the tax results are potentially horrendous. Stan Shadrin, Manu Kakkar and Alex Ghani, “FAPI and…

In a technical interpretation (TI 2019-0814181E5, August 19, 2019), the CRA confirmed that the five-year test to qualify for the “excluded business” exception under the TOSI (tax on split income) rules should take into account all taxation years in which…

The CRA believes that taxable capital gains are “income” for the purposes of paragraph (c) of the “excluded shares” definition in the TOSI rules. The CRA also states that the gains in question should be computed on a gross basis,…

An employee who works in a business on a full-time basis (ie more than an average of 20 hours per week) for five or more years will not be subject to TOSI even where the years occurred before the TOSI…

Mr X owns the voting shares of Holdco that owns a rental property. His two kids own non-voting shares that on which Holdco pays dividends. Does the TOSI apply to dividends paid to the kids? Is the rental operation a…

The ability to use 15(2) and 20(1)(j) for income averaging has been impaired by the TOSI rules. What’s worse, if an individual includes an amount in income under 15(2) that is split income, he or she will not be entitled…