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Category: Capital gain exemption

Shares acquired by a trust are QSBCSs

Posted on: August 21, 2025 Last updated on: August 15, 2025 Written by: John Loukidelis
On January 1, 2023, a newly-formed personal trust purchased shares of Opco from Dad, who owned them throughout the preceding two years. The trust sold the shares on June 30, 2023, to an unrelated person. The CRA found that the…
Continue reading “Shares acquired by a trust are QSBCSs”…

Subsection 110.6(8) issues

Posted on: April 25, 2023 Last updated on: September 9, 2024 Written by: John Loukidelis
Subsection 110.6(8) denies the capital gain exemption for a gain on a share if insufficient dividends are paid on it and the share is not a “prescribed share”. An ordinary common share is a prescribed shares under Reg 6205(1). A…
Continue reading “Subsection 110.6(8) issues”…

Are persons related to themselves?

Posted on: October 27, 2021 Last updated on: October 27, 2021 Written by: John Loukidelis
When are persons related for the purposes of subparagraph 110.6(14)(c)(ii)? A person is not generally deemed to be related to himself except for certain purposes (paragraph 251(5)(c), subparagraph 55(5)(e)(ii), subsection 256(1.5) and determining whether corporations are associated). Compare this to…
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Crystallizing and estate planning

Posted on: April 29, 2016 Last updated on: April 29, 2016 Written by: John Loukidelis
Is it always a good idea to take full advantage of the capital gain exemption (CGE) by crystallizing? Assume Ms X crystallizes her Opco shares, but Opco morphs into an investment holding company by the time of her death. In…
Continue reading “Crystallizing and estate planning”…

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Post-mortem bumps and capital dividends paid from life insurance

Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
Continue reading “Post-mortem bumps and capital dividends paid from life insurance”…

IBTs and the 88(1)(d) bump

In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
Continue reading “IBTs and the 88(1)(d) bump”…

No obligation to correct past errors

The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Continue reading “No obligation to correct past errors”…

Timing of receipt of dividend on redemption

Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
Continue reading “Timing of receipt of dividend on redemption”…

GLGI appeals to be struck?

In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Continue reading “GLGI appeals to be struck?”…

Recent Posts

Post-mortem bumps and capital dividends paid from life insurance

Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
Continue reading “Post-mortem bumps and capital dividends paid from life insurance”…

IBTs and the 88(1)(d) bump

In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
Continue reading “IBTs and the 88(1)(d) bump”…

No obligation to correct past errors

The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Continue reading “No obligation to correct past errors”…

Timing of receipt of dividend on redemption

Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
Continue reading “Timing of receipt of dividend on redemption”…

GLGI appeals to be struck?

In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Continue reading “GLGI appeals to be struck?”…

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Archives

Categories

Recent Posts

Post-mortem bumps and capital dividends paid from life insurance

Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
Continue reading “Post-mortem bumps and capital dividends paid from life insurance”…

IBTs and the 88(1)(d) bump

In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
Continue reading “IBTs and the 88(1)(d) bump”…

No obligation to correct past errors

The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Continue reading “No obligation to correct past errors”…

Timing of receipt of dividend on redemption

Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
Continue reading “Timing of receipt of dividend on redemption”…

GLGI appeals to be struck?

In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Continue reading “GLGI appeals to be struck?”…

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