74.4(4) will not apply to save an estate freeze of Opco from the corporate attribution rule where a trust holds shares in Holdco rather than shares in Opco directly. 74.4(4) would also not apply where Opco1 and Opco2 are frozen,…
Worker status and intention
Bruce Russell, in “The Role of Intent in Determining Worker Status” Tax Hyperion 12:3 (March 2015), notes that recent Federal Court of Appeal jurisprudence seems to require a two-step analysis when determining worker status. The first step attempts to ascertain…
T1135 work
Some tax preparers are reporting that brokerage statements are often inadequate for the purposes of preparing T1135s. An accountant told me that it often takes as long to prepare the T1135 as it does the T1 to which it relates.…
Rodents as food
Neal Armstrong, in his summary of technical interpretation 2015-0564611E5, writes as follows: CRA now construes “livestock” more narrowly than as stated in IT-427R, so that it considers that raising rodents qualifies as farming only if they are sold as food…
Refund not refunded
What happens when a corporation fails to claim refundable tax in a timely manner? Does the amount not refunded reduce RDTOH anyway (per the CRA)? Not according to the Court in Presidential MSH Corporation v R, 2015 TCC 61. (See…
Tax fairness for realtors
Bill 69, the Tax Fairness for Realtors Act, 2015, received first reading in the Ontario legislative assembly on February 26, 2015. The explanatory note accompanying the Bill reads as follows: The Bill amends the Real Estate and Business Brokers Act,…
Another disclaimer dies
I’ll admit that email disclaimers are a pet peeve of mine. They seem to embody some of the less loveable characteristics of lawyers and the law. Anyway, apparently the IRS is now telling US tax practitioners to stop using “Circular…
256(6) and Indemnities
According to CRA technical interpretation 2015-0565741E5, subsection 256(6) will not save the CCPC status of a corporation whose shares are pledged to secure an indemnity. The CRA concluded that an indemnity is not a debt for the purposes of the…
More T1135 paperwork
You file your T1135 for a taxation, and for your trouble the CRA responds with a questionnaire about one of the investments shown on the form. The questionnaire requires the following information (which I have taken almost verbatim from the questionnaire itself):
Notes on Shares of a Specified Class
In applying the association rules in subsection 256(1) of the Income Tax Act (Canada), one can ignore shares of a specified class as defined in subsection 256(1.1). The CRA has said the following about that definition. Regarding the requirements in…