[ITA: 54; 83(2); 84(2); 88(2); 89(1)]
You have been approached by one of your clients, Mr. Sidney Chow, for help in determining what will be the tax
consequences if he sells all his assets in his corporation (at their fair market value) in 2005
Homework CH 16
Note to students: Both problems deal with section 22 election.
Solution to Problem 5: Transfer of Assets to a Corporation
Assess whether s.85 applies to each of the assets
S.85 does apply since a taxpayer has disposed of eligible proper
Suggested solutions to CH 15 Homework
Solution to Problem 3:
Below are suggested solutions on Deemed Dividends to unrelated cases
The transaction results in an immediate deemed dividend of $1,000 due to the fact that the PUC of the
preferred shares in
Income Deferral: Other Rollovers and Use of Rollovers in Estate Planning Rollovers
Involving Corporations and Their Shareholders
Reorganization of Capital
Winding-Up a Subsidiary Shar
Homework Solution 7: CH-11
Schedule 1 Reconciliation and Taxable Income
Net income before income taxes .
Add: Loss on the sale of investment [ssec. 9(3)]. $
Amortization [par. 18(1)(b)] .
Interest on income tax payments [par. 18(1)(t)] .
Solution 1: Taxable Income
Income from business . $
Income from property .
Taxable capital gains .
Allowable capital losses .
(See Victoria Insurance v. MNR, 77 DTC 320)
- Resident by common law principle: taxed in Canada on worldwide income
- central management and control in Canada
- subsidiary of Canadian company
- all directors Bahamian or residen
(Text: Ch. 2)
The taxpayer was a resident of Canada since birth. He departed from Vancouver in
December 2011 and travelled to Australia, where he arrived December 22, 2011. He
applied for, and was granted, permanent resident status in Australi
(See York v. MNR, 80 DTC 174)
- full-time resident of Canada by common law principle: taxed in Canada on worldwide
- continuing state of relationship with Canada, i.e., continuing ties
- history of residence in Canada
(Text: Ch. 3)
The following information for 2016 has been presented to you by Paula Promoter, the new
vice-president of marketing for a public Canadian oil company, Overpriced Petroleum
Limited. Paula, who is 52 years old and now lives in Calg
Warren K. Zimmer v. The Minister of National Revenue, (TRB) 81 DTC 550
A. Resident tax on worldwide income for 2015.
requires a continuing state of relationship with Canada based on facts
past history in Canada: born, raised, and e
ROLL OVER AND TRANSFERS- CH16/17
Use the following Format
Tax value FMV
New debt shares
CH-14 Homework solutions
Solution to Problem 3:
Notice of Objection
Rachel should ensure that the required forms are filled out correctly and that they are signed
by her employer. If all the forms are in order, she has the right under section 165 to objec
Clara Ltd. owns 55% of the shares of Catherine Ltd. - Clara Ltd. and Catherine Ltd. are associated [par.
256(1)(a)] since one corporation controls the other corporation (Clara Ltd. controls Catherine Ltd).
Ms. Miriam owns 51% of the shares of Abig
(A) Upon sale of assets to Hart Ltd. even without electing under section 85 or section 22, Ms. Harts
will get proceeds at FMV as per paragraph 69(1)(b) because she is not dealing at arms length with Hart
Ms. Harts income will be:
Shares in public com
Note: This question deals with Shareholder loans and applicable rules.
ITA: 15(2), 15(2.3), 15(2.4), 15(2.6), 20(1)(j), 80.4; ITR: 4300(7)
In 2016, Sunshine Publishing Ltd., a book publishing company with a fiscal year end on December 31,
made a loan of $
IAF420 Income Tax Two Final Exam Notes
5 Question 90 Marks Total
Question 1 (Chapter 15): Winding-up Corporation (25 Marks)
The two major types of wing-up under section 88 of the ITA that can be described as follows:
1. ITA 88(1) Th
22 years of age. Russell gifted 500 shares of X Ltd., a taxable Canadian public
Thus, he will have a taxable capital gain of $75,000 to report in 2016 ( ($240,000
Net income per financial statements.
Less: Capital gain on land.
Add: Charitable donations.
Taxable capital gain on land (1/2 $135,000).
Income to be allocated.
Bobs share (1/3 $818,100).
Adjusted cost base o
(Text: Ch. 18)
Jim, Bob, and Stan formed the Taxman Associates partnership on February 1,
2014. Each partner contributed $30,000 in return for an equal share of the profits of the
partnership. At the end of the 2016 fiscal year of the partner
Net Income (Loss) for Income Tax Purposes
(2015 and later tax years)
The purpose of this schedule is to provide a reconciliatio
Assignment -3 for marking - Due on Nov. 16, 2016
Assignment is worth 5% of final marks.
Assignment is due at the beginning of class. No time extensions allowed.
One percentage penalty, of your earned mark, will be deducted for late