At the STEP Canada 2023 Round Table, in answer to question 4, the CRA stated that a contingent beneficiary is a beneficiary for the purposes of subsection 204.2(2) of the Income Tax Regulations, which now requires trusts to provide identification…
Property of a trust that prevents the prevention of filing
At the STEP Canada 2023 Round Table, in answer to question 3, the CRA stated that a trust settled with a gold or silver bar, or a collectible coin, cannot satisfy the exception in paragraph 150(1.2)(b) of the Income Tax…
Forgotten capital losses
At the STEP Canada 2023 Round Table, in question 2, the CRA addressed a hypothetical question about the executors of an estate finding evidence of a capital loss realized years before that was not claimed. The CRA agreed that the…
Dividends paid to beneficiaryco, again
In Vefghi Holding Corp. v R, 2023 TCC 135, the court provided the following answers to a Rule 58 Question: Where a trust designates a portion of a taxable dividend (the “Amount”) received on a share of the capital stock…
RRSP spousal rollover
An estate cannot transfer property from an RRSP to a former spouse on a rollover basis under 73(1) (which requires that the transferor be an individual other than a trust) or 146(8.1) (if the former spouse is not a beneficiary…
164(6) carry back procedure
An estate that wishes to carry back a loss to the terminal return of the deceased under subsection 164(6) of the Income Tax Act (Canada) must file an amended T1 for the terminal year. A T1ADJ will not suffice. See…
Sale to alter ego trust
A settlor of an alter ego trust can sell property to the trust for a purchase equal to the fair market value of the property, receive cash in satisfaction of that purchase price and still be considered to have transferred…
Joint spousal trust and 75(2) attribution
A and B each contribute a portfolio of securities to a joint spousal trust, and subsection 75(2) of the Income Tax Act (Canada) applies to each of A and B in respect of their contributions. The CRA takes the position…
Taxation year-end of a trust that has dissolved
The taxation year of a GRE ends at the time it is terminated (all of its assets are distributed) during a year. See paragraph 249(1)(b) and subsection 249(5) of the Income Tax Act (Canada) (the “Act”). On the other hand,…
Trusts and acquisitions of control for 88(1) bump purposes
The CRA confirmed the position it took in ruling 2009-0350491R3 regarding an alter ego trust that owned two corporations. On the death of the settlor of the trust, it was required to transfer the shares of one corporation to the…