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LPC Notes (page 23)

Inventory adjustment disallowed

Posted on: April 12, 2021 Last updated on: April 16, 2021 Written by: John Loukidelis
In Yorkwest Plumbing Supply Inc. v R, 2020 TCC 122, the Court considered an adjustment of $1.2 million that the taxpayer had made to its 2012 net income in respect of inventory that had been purchased and sold before the…
Continue reading “Inventory adjustment disallowed”…

TIP case

Posted on: April 12, 2021 Last updated on: April 16, 2021 Written by: John Loukidelis
Motter c Agence du revenue du Québec, 2021 QCCA 72, aff’g 2018 QCCQ 3483, found that tenant inducement payments “are not an expense category for the purpose of calculating income from a business or property, nor are they a subcategory…
Continue reading “TIP case”…

Series of transactions

Posted on: April 10, 2021 Last updated on: April 16, 2021 Written by: John Loukidelis
In Agence du revenu du Québec c Custeau, 2020 QCCA 1496, the Court considered whether PUC shift and a subsequent reduction of that PUC were part of the same series of transactions such that the Quebec GAAR would apply to…
Continue reading “Series of transactions”…

Post-mortem charitable giving using corporate-owned insurance

Posted on: April 8, 2021 Last updated on: April 16, 2021 Written by: John Loukidelis
Mr X dies owning the shares of Opco. Opco receives a large payout under a life policy it held on X’s life. X’s Will provides for a gift to a charity. How does the estate make the gift using the…
Continue reading “Post-mortem charitable giving using corporate-owned insurance”…

Trusts and Dividends, Again

Posted on: April 7, 2021 Last updated on: April 7, 2021 Written by: John Loukidelis
The CRA believes that a dividend paid to a trust that is then paid to an individual during a year is not allocated until the end of the year (ie December 31 for inter vivos trusts) (CRA technical interpretation 2016-0647621E5,…
Continue reading “Trusts and Dividends, Again”…

QSBCS gains flow through tiered trusts

Posted on: March 23, 2021 Last updated on: March 23, 2021 Written by: John Loukidelis
taxinterpretations.com notes that the CRA, in technical interpretation 2019-0818301I7F (August 13, 2020), has now accepted that a gain realized on the sale of QSBCSs for which an individual could claim the capital gain exemption can be flowed through two levels…
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Climate change and SRED

Posted on: March 23, 2021 Last updated on: March 23, 2021 Written by: John Loukidelis
Tax and climate change intersected in 6398316 Canada Inc. v R, 2021 TCC 17. The Tax Court denied scientific research and experimental development (SRED) tax credits to a corporation that built a passive house. The Court found that the corporation…
Continue reading “Climate change and SRED”…

VDs and enforcement against a related person

Posted on: March 23, 2021 Last updated on: March 23, 2021 Written by: John Loukidelis
The taxpayer, in a previous application (2019 FC 51), succeeded in having the Court order the CRA to reconsider its decision because it did not adequately address how the demand for returns from the individual would have uncovered the corporation’s…
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Oral evidence

Posted on: March 2, 2021 Last updated on: March 2, 2021 Written by: John Loukidelis
In Osinski v R, 2013 TCC 71, the Court wrote: 20 With respect to both parties, the law in my opinion is simply as stated in C. (R.) v McDougall, C. (R.), … 2008 SCC 53, above by Justice Rothstein…
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Taxpayer onus regarding limitation period

Posted on: March 1, 2021 Last updated on: March 1, 2021 Written by: John Loukidelis
In Manna v R, 2019 TCC 70 (informal procedure) the Court held that the taxpayer has the onus to show when a normal reassessment period began if the taxpayer wishes to rely on the expiry of the period as a…
Continue reading “Taxpayer onus regarding limitation period”…
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Post-mortem bumps and capital dividends paid from life insurance

Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
Continue reading “Post-mortem bumps and capital dividends paid from life insurance”…

IBTs and the 88(1)(d) bump

In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
Continue reading “IBTs and the 88(1)(d) bump”…

No obligation to correct past errors

The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Continue reading “No obligation to correct past errors”…

Timing of receipt of dividend on redemption

Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
Continue reading “Timing of receipt of dividend on redemption”…

GLGI appeals to be struck?

In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Continue reading “GLGI appeals to be struck?”…

Recent Posts

Post-mortem bumps and capital dividends paid from life insurance

Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
Continue reading “Post-mortem bumps and capital dividends paid from life insurance”…

IBTs and the 88(1)(d) bump

In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
Continue reading “IBTs and the 88(1)(d) bump”…

No obligation to correct past errors

The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Continue reading “No obligation to correct past errors”…

Timing of receipt of dividend on redemption

Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
Continue reading “Timing of receipt of dividend on redemption”…

GLGI appeals to be struck?

In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Continue reading “GLGI appeals to be struck?”…

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Archives

Categories

Recent Posts

Post-mortem bumps and capital dividends paid from life insurance

Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
Continue reading “Post-mortem bumps and capital dividends paid from life insurance”…

IBTs and the 88(1)(d) bump

In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
Continue reading “IBTs and the 88(1)(d) bump”…

No obligation to correct past errors

The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Continue reading “No obligation to correct past errors”…

Timing of receipt of dividend on redemption

Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
Continue reading “Timing of receipt of dividend on redemption”…

GLGI appeals to be struck?

In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Continue reading “GLGI appeals to be struck?”…

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