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Unformatted text preview: 4561-11-111Lecture 2 Review of Shareholder Loan Rules and Residency and Departure from Canada last updated April 30, 2010 (changes in red)2Readings and Problems for Residency and Departure from CanadaReadings: IT-221R3 at www.cra-arc.gc.ca/menu/APAP_I-e.htmlFIT Ch. 2, 2,000 to 2,130 inclusive FIT Ch. 19, 19,000 to 19,210 inclusive, 19,230, 19,260, 19,280Income Tax Act: Sections 2; 3; 128.1(1)(b); 128.1(4)(b) to (d); 250(1) and (4) ADMS 3520 Lecture 1 (look under Other Course Materials on 4561 course website)Recommend All Chapter 2 Multiple Choice Questions 2, 3, 4, 5,(A)(B)(D); Exercises 1* and 2; Review Questions 1 to 5, 9, 13. All Chapter 19 Review Questions 1, 2,5,6, 7,9,12, 13 Multiple Choice Questions 1 to 5 and Exercises 1, 2, 5 and 6 Answers to all multiple choice, exercises and review questions are in the back of the book*The solution to Chapter 2, Exercise 1(F) could be improved: The answer is correct but a more complete and accurate solution would be as follows: She is not a common law resident of Canada based on the facts. She is not deemed to be a resident by any paragraph in subsection 250(1) since paragraph 250(1)( b) does not apply to spouses.Problem SetChapter 13, Problem 4: Stuart Sunshine (review of shareholder loan rules)3Review of Shareholder Loan RulesReadings:see Lecture1RecommendChapter 13, Multiple Choice 1 & 2 and Exercise 2 Review of Rules covered in Lecture 1 using Chapter 13, Problem 4:Stuart Sunshine 4Residency and Departure Tax4.1Liability for TaxThe liability for income tax in Canada is based on residency. Residency for tax purposes (i.e., what we discuss in this course) is not the same as residency for citizenship/immigration purposes. There are three categories of taxpayers: residents, non-residents and part-year residentsCopyright J. Magee/York University [email@example.com]4561-12-114.1.1Residents of Canada are taxable on their world income Subsections 2(1) and (2) state that if a taxpayer is resident at any time in the year, the taxpayer is taxable on worldwide taxable income (Part I Division B net income minus Division C deductions) 4.1.2Non-residents are taxable under Part I of the Act only on certain sources of incomeNon-residents are taxable under Part I of the Act on Canadian employment income and Canadian business income if they carried on these activities in the year or a previous year. They are also taxable on taxable capital gains on the sale of taxable Canadian property. Subsection 2(3) says non-residents are taxable on Division D taxable income which is limited to these items. A tax return is filed for this Part I Division D taxable income.Taxable Canadian property (subsection 248(1)) includes*- Canadian real estate- Property used in a business carried on in Canada - Shares of private corporations resident in Canada** - Shares of public corporations if the taxpayer (together with related persons)owns >25% of any class of shares***As discussed under the next heading 22.214.171.124, for dispositions of taxable *As discussed under the next heading 4....
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This note was uploaded on 08/10/2010 for the course LAPS 4561 taught by Professor Frankovic during the Summer '10 term at York University.
- Summer '10