Alex Klyguine, in “Income Splitting After the New Private Corporation Proposals: Salaries Paid to Family Members” 8:1 Canadian Tax Focus (February 2018), discusses Gabco Limited v MNR, 68 DTC 5210 (Ex. Ct.)), and suggests that “the boundaries of the reasonableness test…
SBD limit assignment headaches
A CCPC might want to assign a portion of is small business deduction limit to another corporation because of the specified corporate income rules. The assignment will be problematic, however, if the assignor’s year-end occurs before that of the assignee.…
Pipeline death watch?
Finance is not proceeding with the July, 2017, proposals to amend 84.1 and introduce new 246.1. Also, Finance has said that it will focus on developing the passive income proposals. Finance has also said, however, that it believes post-mortem gains…
“May deduct”
Using “a textual, contextual and purposive analysis”, the Tax Court in Zhang v R, 2017 TCC 258 (informal procedure), concluded that “may deduct” in ‘D’ in the formula in 118.61(1) meant “is entitled to deduct” rather than “chooses to deduct”.
CDA timing
A corporate-recipient of a capital dividend is entitled to add the amount of the dividend to its capital dividend account at the time the dividend is received even where the relevant election is late-filed. CRA technical interpretation 2017-0718311E5.
Project for employees
The CRA has a new ‘project’ underway. This time the target is employees who deduct employment expenses under section 8 of the Income Tax Act. The CRA seems to be on the lookout for employees who are also shareholders of…
Getting tracked
These days, in so many aspects of our lives, we are the product (as the saying goes). Retailers, for example, offer loyalty programs because, among other things, they allow our spending habits to be tracked. It turns out that the…
Elective dividend refund
Donald Cherniawsky, in “Are Dividend Refund Claims by Dividend-Paying Corporations Elective?” 17:4 Tax for the Owner-Manager (October 2017), refers to CRA technical interpretation 2016-0649841E5. The TI states that a dividend payer could elect not to claim a dividend refund in…
Employee discounts
Kathryn Walker, “Employee Discounts for Merchandise: The Law” Canadian Tax Focus 7:4 (November, 2017) argues that the CRA’s new policy in Income Tax Folio S2-F3-C2, “Benefits and Allowances Received from Employment” on employee discounts simply reflected a change in the…
Cell phone costs for employees
Neal Armstrong draws our attention to Meberatu v R, 2017 TCC 211. The Court allowed the taxpayer-employee to deduct amounts in respect of her work-related use of a cell phone. The amounts permitted were estimates because the taxpayer failed to…