How does the presence of a partnership in a structure affect the analysis of whether persons are related under section 251 of the Income Tax Act (Canada)? A partnership is not a person for the purposes of section 251 Where…
Trusts need to watch out
The federal government has allocated significant additional funds to the CRA to permit it to enforce better compliance. The CRA has targeted family trusts (among other things). The CRA’s audit process for a trust involves accumulating documentation and information about…
Capital gains and excluded shares
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,…
Audit success
Automobile benefits are fish in a smaller barrel for CRA auditors. If all else fails, the auditor can recover something for his or her time by reassessing them. (My experience on the subject is probably not representative. Nevertheless, it’s the…
Due diligence reverses penalty
In Moore v R, 2019 TCC 141 (informal procedure), the taxpayer, in filing his 2016 return, realized that he needed to file a T1135 for shares he owned of a US corporation that he had acquired under an employee stock…
Section 160 butterflies
In Eyeball Networks Inc. v R, 2019 TCC 150, the court held that section 160 applied to a transferee corporation (the new operating company or “TC”) that had received property from a distributing corporation (the old operating company or “DC”)…
Bitcoin mining
The CRA, in technical interpretation 2018-0776661I7 (August 8, 2019), takes the position that a Bitcoin miner receives Bitcoin as barter for services rendered. The transaction is a barter transaction because Bitcoin isn’t legal tender (see IT-490 “Barter Transactions”). The receipt…
Handing over records to CRA
Clients sometimes complain to me that they have given records to a CRA auditor who then returns only some of the records or returns them in a disorganized state that makes them difficult to work with. Accordingly, if a client…
Employee parking pass
Amit Ummat summarizes Smith v R, 2019 FCA 173, in which the Court held that a flight attendant received a taxable benefit from an employer-provided parking pass.
Director resignations
In Singh v R, 2019 TCC 120, the taxpayer had been assessed as a director of a corporation for its unremitted HST. The issue considered by the Court was whether, as the taxpayer claimed, he had resigned more than two years before the date of the assessment in issue (per subsection 323(5) of the Excise Tax Act).