AIT805 Taxation I LN6 Ch.6 2009 PP slides

AIT805 Taxation I LN6 Ch.6 2009 PP slides - TAXATION I...

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TAXATION I LESSON NOTES 6 (LN) Chapter 6 ___________________________________________________________________ Income from Property The following approach is recommended in reviewing this chapter: Read the text 1 , chapter 6. Read the following lesson notes on chapter 6. Practice use of the CCH Tax Research Library, on CD-ROM . Learning Outcomes: Review the learning outcomes for this chapter. The following topics are covered: 1. Definitions. 2. Specific Inclusions of Property Income. 3. Interest Income. 4. Dividends. 5. Dividends and Individuals. 6. Dividends and Corporations. 7. Other Notable Dividends Tax Matters. 8. Payments Based on Production or Use. 9. Rental Income. 10. Forgiveness of Debt. 11. Foreign Property Income. 12. General Deduction from Property Income. 13. Tax Planning and Investments. 14. Income Splitting. 15. The Income Attribution Rules. 16. Investment Decisions. 17. Tax Shelters. 18. Concluding Concepts to Remember. 1. Definitions ITA 248(1) Definitions in this subsection relates to the ITA as a whole. A definition that relates to a specific provision of the ITA is found within that particular provison. In the absence of a definition in the ITA the ordinary meaning of the word applies. AIT805 Taxation 1: LN 6 - Ch. 6 Income from Property 6-1
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Where ambiguity exists, the courts normally take the strict, literal meaning of the word. “In Stubart Investments Ltd. V. The Queen 84 DTC 6305 (S.C.C.), Justice Estey, quoting the Construction of Statues by E.A. Dreidger, stated that:” “The words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.” The word property is defined in ITA 248(1) to mean property of any kind including real or personal, immovable or movable, tangible or intangible, or corporeal or incorporeal and includes: o a right of any kind whatever, a share or chose in action, o unless a contrary intention is evident, money, o a timber resource property, and o the work in progress of a business that is a profession. 2. Specific Inclusions of Property Income ITA Subdivision b of Division B deals with Income or Loss From a Business or Property Property income is viewed as passive income, a return of invested capital where little effort is expended by the investor. The main feature that differentiates business income from property income is the lack of effort required to generate property income. Property income includes rents, royalties, interest and dividends paid for property use and income attributed to shareholders. ITA 12 specifically includes the above noted returns on investment in property income. 3.
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AIT805 Taxation I LN6 Ch.6 2009 PP slides - TAXATION I...

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