An estate can file an election under subsection 159(5) of the Income Tax Act (Canada) using form T2075. The election permits the deferral of the payment of taxes owing as a result of the deemed disposition of property on death.…
55(3)(a) purpose test?
The CRA believes that a dividend otherwise exempt under paragraph 55(3)(a) of the Income Tax Act (Canada) will be subject to GAAR if one of the purposes of the dividend was to increase the cost of property contrary to the…
Section 160 and FMV Consideration
A dental professional corporation (the vendor) sold its professional practice to an arm’s length purchaser. Some of the proceeds from the sale were paid to the shareholder of the corporation (the dentist) who used the funds to pay obligations of…
Back-to-back loans
Bill C-29 (Dec 2016) amended the Income Tax Act (Canada) so that a loan by a corporation to an arm’s length entity could be treated as a loan to a shareholder of the corporation if the entity is required to…
Hiatus
I haven’t posted since May 20, 2020, which represents one of the longest (if not the longest) stretches I’ve gone without adding content to this site. My site was hacked, and so it has taken me a while a to…
Burden of proof
One sometimes hears that a taxpayer’s task in a Tax Court appeal is to “demolish” the assumptions of the CRA (as listed in the Crown’s Reply) by proving them wrong on a balance of probabilities. Webb JA, in Morrison v.…
Fraudulent conveyances and estate planning
CanLII Connects has posted a good article by Duncan J. Manson on fraudulent conveyances and estate planning. The article is BC-centric. Would the analysis be any different under Ontario law?
Director due diligence
Ahmar v R, 2020 FCA 65, reminds us that a director is not duly diligent if he fails to remit HST in the hope that he can turn around the corporation’s business. This is true even where the director is…
Application denied
A taxpayer cannot bring an application for a court order preventing the CRA from exercising its power to demand records and information even where the taxpayer believes that the CRA would be estopped from issuing an assessment for a matter to which the records and information relate.
Rectification revival
The BC courts continue to do their part to revive rectification as an important tool for fixing tax mistakes (or, more properly, delineate better the circumstances in which the tool can be used). See 5551928 Manitoba Ltd. (Re), 2018 BCSC…