The CRA has previously stated that a deemed dividend arising on the redemption of a taxable preferred share (TPS) for a “specified amount” will not be an excluded dividend for the purposes of Part VI.1 of the Income Tax Act…
Borrowing from RRSP to loan to Opco
If the technical requirements of the Income Tax Act (Canada) are met, a taxpayer can mortgage her house to her RRSP and then deduct the interest on the loan from the RRSP, if the loan proceeds are on-loaned to Opco.…
Self-assessing GAAR?
In Quinco Financial Inc v R, 2016 TCC 190, Justice Bocock held that interest on a GAAR assessment accrues from the balance due date, just like any other assessment. His Honour, however, in obiter, also stated that a taxpayer has…
Corporate gifts
Neal Armstrong reports that the Quebec Court of Appeal, in Emballages Starflex Inc. v Agence du revenu du Québec, 2016 QCCA 1856, has held that a corporation cannot deduct a gift to a charity as a business or promotional expense.…
No rollover for voluntary dispositions of farm quota
In technical interpretation 2016-0666901E5, the CRA was asked whether the new rules applicable to farm quota after 2016 will provide for a rollover equivalent to the one found in s 14(6) of the ITA for voluntary dispositions of quota. The…
Agreement not to audit
Neal Armstrong reports that the Federal Court has ruled that an agreement concluded by one auditor not to further audit a taxpayer is binding on the CRA. See Rosenberg v MNR, 2016 FC 1376. I have not been able to…
S 55(2.1)(b)(ii)(B) and cash
According to the CRA, cash is property for the purposes of the application of s 55(2.1)(b)(ii)(B). 2016 CTF Roundtable Q8. S 55(2.1)(b) reads as follows: (b) it is the case that (i) one of the purposes of the payment or…
RRSP/RRIF/TFSA “advantages”
The CRA believes that an annuitant who pays fees (investment management and other fees) for an RRSP/RRIF/TFSA thereby derives an “advantage”. The CRA says that, with effect after 2017, plans must be changed so that the fees are charged to…
More s 55 hocus pocus
Holdco owns all of Opco’s issued shares. Both corporations have calendar year-ends. Opco doesn’t have any safe income, but it has $383,333 of RDTOH. Opco pays a $1 million dividend to Holdco, which pays a $1 million dividend to its…
You’d better calculate safe income
The CRA appeared unsympathetic to the idea that detailed calculations of safe income might not be necessary where Opco is wholly-owned by Holdco, and Opco accounting income does not differ greatly from its taxable income. The CRA representative spoke darkly…