Week 10 - Week 10 Death Deemed Disposition Deemed...

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Week 10 Death Deemed Disposition - Deemed disposition of all your property, properties that went up in value, triggering capital gains, triggering - Deemed disposition; exempts you from deemed disposition rule - Transaction with spouse, exception, sold at cost because of spousal rollover, any time you deal with your spouse while alive, you deal at cost - Spousal rollover also applies at death, leave to child deemed to disposed of at FMV, any property to spouse, sold at cost, because of the spousal rollover applies, cost not FMV - Want to avoid tax on death, leave property to spouse, life expectancy of men; women live longer than men, no tax on death - Deemed disposition at FMV at the time of her death, re-marries and leave her property to her new spouse - Last to die spouse should get a new spouse, kids have something to say Tax returns for the year of death - Terminal return - “Rights or things” payable to you, legal right to collect it and it actually wasn’t paid, a dividend that was declared and payable but did not get the cheque before you died, earned a salary but didn’t get it before you died, something you earned but was not payable is not included in this, interest was not payable to you even though it might have been earned - Stub trust return (not covered in this course), file more than one return o Get the basic personal tax credit and couple of others, get them on each return, good thing o Benefit of the tax bracket twice, lowest is $45,000 is twice, sympathetic to you Deadline to file return - Terminal return 6 months from death or normally due, which one is later, could get an extension, terminal return up to February and the other return (extension for terminal return and other returns as well) Amalgamation - Two different companies or more and putting several companies into one - Legal procedure; two companies, basically instead of having two companies, you make one - Amalgamation and merger and acquisition; one company buying another company or business - Merger; still two legal companies and operate as one, amalgamation; legally combined into one entity, merger could be amalgamation or something else - Vertical amalgamation; parent sub relationship, Company A was the parent of Company B, combine the two - Structure, vertical relationship and vertical amalgamation
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- Horizontal amalgamation; between two sister companies that do not share a parent sub relationship - Triangular amalgamation; person owns company A, and company A owns company B and person owns company C, the formation is a triangle and hence the name Why amalgamate - Company B losses cannot be used against the profits of company A, owned by the entity they generate - American tax; consolidated reporting, pool together the income and losses of all the companies, then pay tax on the combined amount, that is not possible in Canada - Consolidation principle; financial accounting purposes three categories, passive investment (no strategic influence; cost method), control investment (consolidation), some influence significant
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