Non Cap. LCF: March 22/04 = 7yr March 23/04 = 10 yr After 2005 = 20 yr Transfer to a Corp.

Transfer to a Corp. & A partnership must calculate income as if it were a separate person resident in Canada. || Ex) Both Jonathan and Robert Rosen are single and have no current sources of income other
Tax Value FMV Redemption of Shares: General partners are jointly and severally liable for the debts of the company. || General than the trust. The undistributed income is to accumulate within the trust, to be paid out to
Gross Div. Grossed Federal Div. Tax Credit (DTC) Accounts Receivable 1)Build. cost = $942,000
Up Up
$240,000 $224,000 partners are entitled to participate in the management of the company. || Unless the the two sons at the time of Mr. Samuel Rosen’s death. The income figures for the year ending
Building (Note1) 832,000 1,047,000 2) two assets in Class 8. A partnership agreement states otherwise, general partners are entitled to an equal share of the on December 31, 2014, are as follows:
Eligible 38% 138% 6/11*gross up has a cost of $54,000 and a
(CCPC) 20.727% *Div. received Depreciable Assets - profits of the business. [Advantages of Partnership: They may be able to split income Interest Income On Government Bonds $ 55,000
106,000 123,000
CCA Class 8 (Note2) FMV of $65,000. And B has with family members who are employed by the business. || They may be able to reduce their
Non-Eligible 18% 118% 13/18* gross up a cost of $66,000 and a FMV Eligible Div.s Received From Canadian Corp.s 245,000
Div.s 13%* Div. received Goodwill Nil 400,000 personal income taxes during the start-up years. ] [A joint venture might be recognized
of $58,000. Revenues From Rental Property 394,000
Eligible Div. ex) Eligible Div. = $4,000*1.38 = 5520 || Fed. DTC = 4000*(6/11)*(38%) =829 Inventories 440,000 462,000 because it would demonstrate one of the following factors: Co-venturers do not have the
3) Machine cost = $425,000 Cash Expenses On Rental Property 247,000
Land 300,000 622,000 power to bind other co-venturers contractually.] [Partnerships and joint ventures: Neither
CCPCs prefer div. to be paid in the following order: CDA, GRIP then SB Div.. Machinery (Note3) 394,000 546,000 On September 1, 2014, the rental property was sold. The property consisted of an
The transfer of the Summers joint ventures nor partnerships are taxable entities. || All partners in a partnership are subject
Conditions is required for ITA 55(2) (Cap. gains stripping rules) to apply: Temporary Investments 84,000 74,000 Industries’ assets to to the same CCA decision in a given tax year, while members of a joint venture may each apartment building and the land on which it was located, all of which was transferred into
|| There is a disposition of shares by a Corp. to an arm’s length party. || The Corp. that has disposed Total Assets $2,396,000 $3,498,000 Summers Inc. is on July 1, decide their own amt of CCA to be deducted. || The concept of a joint venture is not the trust when it was established. The relevant information related to the disposition is as
of the shares has received Div.s that are deductible under ITA 112(1). || One of the purposes of the Liabilities -142,000 -142,000 2015, and an election will be recognized by provincial legislation while the concept of a partnership is.] [The ACB of a follows:
Div. received by Corp. was to significantly reduce a Cap. gain on the disposition of shares. || Net Assets $2,254,000 $3,356,000 made under ITA Building Land
partnership interest: || The share of the business income for the preceding year. || The
Conditions required for ITA 84.1 (Div. stripping rules) to be applicable: 85. Summers Inc. will POD $1,857,000 $1,100,000
original cost of her partnership interest. || The amt of cash that she withdrew from the
|| The shares that are disposed of must have been held as Cap. property. || The share disposition must assume the liabilities of Summers Industries and, in addition, will issue $1,600,000 in new debt to Undepreciated Cap. Cost 1,371,000 N/A
Ms. Summers. With respect to share consideration, the new Company will issue preferred stock business in the preceding year.] [Limited partnerships the purpose of the at-risk rules is:
be made to a Corp. with which the taxpayer does not deal at arm’s length. || The taxpayer who To ensure that the tax deductions Avail. to limited partners do not exceed the amt they have
disposes of the shares must be a Canadian resident. with a FMV of $400,000 and common stock with a FMV of $1,364,000. GRIP balance is NIL.
at-risk.] {{The establishment of a trust: Naming individual beneficiaries is not necessary Trust
Receivables /Temp. Investments: Exclude the AR from ITA 85 election, If AR is transferred Jon (35%) Rob(25%)
Considered part of the boot received by a transferor in an ITA 85(1) rollover: as long as the beneficiaries are members of an identifiable group (e.g., the settlor’s (40%)
|| Debt securities of the transferee || Assumption of transferor debt by the transferee. || Cash. under ITA 85, cant election under ITA 22, $16,000 ($240,000 - $224,000) loss will be a Cap. loss,
which will be disallowed under ITA 40(2)(g) because the transfer is to a Corp. controlled by the children). || The settlor must clearly intend to create a trust. || The property to be held in the Int. Gov. Bonds $19,250 $13,750 $22,000
In ITA 85.1(Share for share exchange): This rollover provision is commonly used in business transferor. trust must be known with certainty. || There must be an actual transfer of property to the Eligible Div. Rec. 85,750 61,250 98,000
combination transactions.  Ex) Sam owns 100% of the shares of a CCPC. He wishes to exchange trust.|| Trust is deemed to be: an individual. [A testamentary trust is one that is
his shares for shares of a large public company w/out incurring a tax liability. Minimum Elected Values: (1) The min. elected value for a dep. property, established at the time of an individual’s death. || The trust return is due 90 days after the Gross Up Of 38 % 32,585 23,275 37,240
Accounts Receivable $ 224,000 under ITA 85(1)(e), is the least of the UCC for the
trust’s year end.|| $40,000 exemption Avail.|| ] [ There is a deemed disposition of certain
One requirement for ITA 85(1) with the consideration that the Corp. must give the transferor in class, the cost of the individual property, and the TCG Land [(1/2)($1,100 - $785] 55,125 39,375 63,000
exchange for property transferred to the Corp.: The consideration given to the transferor can only
Temporary Investments 74,000 types of property when an individual passes away. This would include property held by
FMV of the individual property. TCG Build.[(1/2)(1,857- 1,620)] 41,475 29,625 47,400
include at least one share of the Corp. Inventories 440,000 one type of trust for which the deceased taxpayer was a settlor. An alter ego trust. || When
Class 8 Depreciable Assets (1) 106,000 Asset A* 54,000 Net Rental Income (1) 138,600 99,000 158,400
In transferring a business to Corp., A/R can be transferred using either ITA 22 or ITA 85(1), but not Asset B** 58,000 assets are transferred out of an alter ego trust to anyone other than the settlor, the proceeds
both. Advantages of using ITA 22: The acquiring corp will be able to ded. bad debts reserve after Machinery 394,000 of disposition to the trust will be the FMV of the assets transferred.|| ] [Inter vivos trust Net Taxable Income $372,785 $266,275 $426,040
Total $112,000
the transfer || The vendor will be able to deduct any resulting loss as business loss || The acquiring Land 300,000 :||The trust will not be taxed on income that is distributed to the children during the year. ||
Corp. may include income as a result of the transaction. Building 832,000 Capital Cost/ACB 1,620,000 785,000
* A (Least Of $106,000, $54,000, And $65,000) The settlor will recognize the accrued capital gains on the securities at the time of their
Pref. shares are issued in an ITA 86 reorg. , it is important that they have characteristics that
Goodwill 1 ** B (Least Of $106,000, $66,000, And $58,000) transfer to the trust. || The income retained in the trust will be taxed at the max. 29% rate This is the first disposition of capital property by the trust since its establishment.
serve to establish their FMV. To establish the FMV of preferred shares: Total Elected Value $2,370,001 applicable to individuals.] [The amts will be included, either as an inclusion or a deduction, (1) The net rental income, including the recapture of CCA:
||A provision which requires redemption at a specified value at the discretion of the shareholder. in the determination of Net Income For Tax Purposes of a trust: || Retained income which Revenues From Rental Property $394,000
||A claim to assets that has priority over the C/S in the event of liquidation. ||A fixed div. rate. || ACB Of The Consideration: The ABC of the non-share consideration would be its FMV which, in has been allocated to a preferred beneficiary of the trust. || Amts paid or payable to a Cash Expenses On Rental Property ( 247,000)
the case of debt, would be its face value of $1,742,000 ($1,600,000 + $142,000 [new + old debt]). Recapture Of CCA:
Conditions are required Under ITA 86 (Exchange of Shares in a Reorganization) : beneficiary of the trust. || Amts that have been paid to a beneficiary but have been designated
|| Transferor of the original shares must receive shares of the new Corp. as consideration for his Total Elected Value $2,370,001 not to have been paid. ] } } {{[ Residency: || Canadian residents must report their worldwide Capital Cost Of The Building $1,620,000

Fed Rates: ([>44,701 is 15%) = 6,705] [ (89,401- 44,701) * 22%) =9834]

shares. || The new shares that will be issued must be authorized by the Corp.’s articles of in Corp. Non-Share Consideration ( 1,742,000) income for tax purposes. || If an indiv. is a resident of Canada for part of the calendar year, UCC Balance ( 1,371,000) 249,000

Recap.: will be added to income (ABI) ||Terminal Loss: A fully ded.||

(currently, or through an amendment prior to the reorganization). ||The original shares must be Avail. For Common And Preferred Shares $ 628,001 that indiv. only has to report his worldwide income during the period of residency for Net Rental Income, Including Recapture $396,000

Assets not ideal For ITA 85(1): ||A/R (S22) ||Shares quali. for QSBC ded.||
held by the owner as Cap. property. || ACB Of Preferred Stock (FMV ) ( 400,000) Canadian tax purposes. ||An indiv. can be a resident of Canada for tax purposes, even if she

||Dep. assets with terminal loss ||Non-dep. assets w/ accrued cap. losses||
is not a Canadian citizen.] [Types of income are subject to withholding tax under Part Tax Payable For The Trust
The application of ITA 88(1), winding up of a 90 % owned subsidiary: || A write up of non-Dep. ACB Of Common Stock (Residual) $ 228,001

 [(138,586-89,401) *26%] = 12,788]  (>138,586 is 29%)

Cap. property may be avail. || Subsidiary losses will become avail. to the parent company in its first XIII: A withdrawal from a RRIF by a former resident of Canada.|| A deferred bonus from a Federal Tax Before Credits [(29%)($426,040)] $123,552
taxation year which begins after the windup. || The tax values of the subsidiary assets will be PUC Of The Pref And C/S: The PUC calculation would begin with former employer who is resident in Canada. ||Dividends received from CCPC. ] [Residency
the legal stated values of the shares. These were $400,000 for the pref. Federal Div. Tax Credit [(6/11)($37,240)] ( 20,313)
carried forward to tax records of the parent company. || Disposed assets at UCC to parent, the bal. of Individual (ITA-5) : Basic ties: Dwelling|| Spouse or partner || Dependants|| ] [Part

Non-Cap. losses incl. losses from a business or employment.

Note: that Non-Cap. LCF can only reduce similar income.
before CCA is Nil and no CCA is taken by Sub because CCA is claimed by parent|| stock and $1,364,000 for the common stock. ITA 85(2.1) reduction: Federal Tax Payable $103,239
Year: Departing Canada Latest (recent) Date of: Departure || Departure of spouse and
||GRIP when amalgamated company is a CCPP || Non-Cap losses || Net Cap. Losses|| will flow through from a Total Increase In LSC ($400,000 + 1,364,000) $1,764,000 dependants || establishment of new resident || ] [Deemed Resident (ITA-250(1)): Sojourners Inter vivos trust, all of its income is subject to federal tax at 29% [ITA 122(1)].
predecessor company to an amalgamated company under ITA 87 (100% owned) Less Excess Of: (183 days) – Do not stay overnight|| Ambassadors of Canada (Government Officials) || A
Total Elected Value ($2,370,001) child of deemed resident provided that the dependent has income less than Basic personal The total PUC of $628,001 ($142,404 + $485,597) is equal to the difference between the elected
Application of ITA 87: || Losses of the two predecessor companies can be used by the amalgamated company in
its first taxation year. || The Dep. Cap. property of the predecessor companies will be carried forward to the tax Over The Total Non-Share Consideration 1,742,000 (628,001) value of $2,370,001 and the non-share consideration of $1,742,000. It is also equal to the total ACB
tax credit($11,138).]
records of the amalgamated company at UCC values. ||Cap. Div. acct of the predecessor companies will be avail. Reduction In PUC $1,135,999 of the two classes of shares ($400,000 + $228,001).
to amalgamated company if a private company. || GRIP bal. is avail. to amalgamated company if it is a CCPC|| Chapter 21: [|| In a province, there can be a provincial sales tax or the HST, but not both. Input Tax Credit (ITC):
Ex) If the company is predicted to have taxable income will exceed $500K. They should consider paying an The PUC reduction would be allocated on the basis of FMV s as follows: || Long-term residential rents are exempt from GST. || Manitoba and Saskatchewan charge Purchases
additional salary to ensure the taxable income of CCPC will be less than $500K. || The income over $500k GST at the same rate.] [Canadian government compensate for the regressive nature of the Ex) Revenues: Amort Exp.
Pref. Stock [($1,135,999) ($400,000 ÷ $1,764,000)] $257,596
remains in the company it will not benefit from the SBD therefore after tax retention on this excess income in the
Common Stock [($1,135,999) ($1,364,000 ÷ $1,764,000)] 878,403 GST: || By providing a refundable GST tax credit that is avail. to low income individuals. ||] Fully Taxable Goods $175,000 Salaries+Wages
company will be lower than paying a salary || Also, If Corp. is in a province with high Corp. tax rate.|| Inteterst Exp.
Ex) In 2013 Tax. Yr CCPC, Tax. Income=$467,000. In 2013, the Tax. Cap. Empl. in CDN of $14 mil. And Total PUC Reduction $1,135,999 [Despite several advantages of transaction taxes, such as their simplicity, they are not the Exempt Services 50,000 $225,000
Other Op. Exp.
$15 mil. in 2014. |Annual Exp. Lim. 2014= [8 mil – (10)(500k) x ((40 mil – (14 mil - 10 mil))/40 mil]= 2,700,000 | only source of revenue for the federal government. income taxes are still used as a significant
Subsequent to applying this reduction, the remaining PUC: Less Expenses: Equipment
Ex) A store is currently operating as a proprietorship. Sadia wants to transfer her proprietorship assets to a source of revenue for the government because they are less regressive than transaction taxes.] Building [a]
Corp. in exchange for shares and non-share consideration. Under ITA 85(1) the transfer and elected transfer Preferred Stock Common Stock Cost Of Goods Sold -$95,000
price on inventory equal to the FMV> Cost . Result: ||Business Income= FMV-cost = transfer price - tax value || Legal Stated Capital $400,000 $1,354,000 [ Fully taxable supplies are taxed at the HST rate and zero-rated supplies are taxed at 0% GST Refund
|| Expenditures related to both types of supplies are eligible for input tax credits. || Zero-rated Amortization Exp. -15,000
Ex) Jessica Huebner wishes to transfer a piece of machinery to a Corp. using ITA 85(1). This machinery is PUC Reduction ( 257,596) ( 878,403) = GST on Sale [1] [2] – ITC [1]
currently used to produce income. It has a Cap. cost of $500,000, a UCC balance of $112,000 and a FMV of supplies are taxable at 0%, while exempt supplies are not taxable. Expenditures related to Salaries +Wages -12,000 [1]
Total PUC $ 142,404 $485,597 At the given rate (5%)
$100,000. || Under ITA 85(1), the terminal loss could be deducted if the use of the property is changed to non- zero-rated supplies are eligible for input tax credits, any exempt supplies are not eligible||] Interest Expense -10,000 [a]
Remaining bal. after
income producing asset at a later date after the transfer. ||
Sale of Assets: [1] A/R no section 22 election {[A GST rebate is Avail. to employees of a GST registrant located in a province that does not Other Operating Exp. -35,000 -167,000 the percentage used
Ex) Mr. Chu wishes to transfer his proprietorship to a Corp.. Will has no eligible Cap. property on the B/S of
|| A/R FMV – A/R Actual cost = A/R G/(L) + A/R allowance = A/R Cap. G/ (L) * 50% = Allowable G/(L) || participate in the HST program. The calculation is based on a factor of 5/105 of: || All Income Before Taxes $58,000
the proprietorship, but you recommend that he transfer goodwill at an elected value of $1. || To ensure the
[2]
goodwill is incl. in the election, and also ensure the transfer of goodwill is not considered a gift. || [2] Inventory  || FMV Inventory – Inventory Cost = Inventory (ABI) || eligible expenses for fully taxable supplies deducted in the calculation of net employment Less: Fed. +Prov. Taxes -18,000 Sales- Exempt supplies
Ex) Fatuma would like to transfer her Corp. to her son. Her son will not have the funds to purchase all of the [3] Market Security  || FMV Market Security - Market Security cost = Market Security (ABI) || income, including capital cost allowances.||] [ Part I Tax On Non-Resident - Types Of Net Income $40,000 - Zero related Supplies
shares for at least 5 yrs. || An ITA 86 reorganization of share capital. || will permit Fatuma to transfer the future Income : Employment In Canada || Carried On Business In Canada || Disposition Of Taxable
growth of the company to her son without any immediate tax effect for herself. [4] Land  || FMV Land – Land Cost = Capital Gain * 50% = TCG / CDA || Other Information:
Canadian Property ]} { A tax that is assessed on specified types of transactions. -
Ex) The owner-manager of a CCPC has annual salary of $80,000 per year. In 2015, after ded. her salary, the [5] Building/ Equipment  || FMV Building – Cost Building = Capital Gain * 50% = TCG / CDA || Inventories of taxable goods decreased by $10,000 during the year. || A capital expenditure was made
CCPC will have additional income of $200,000. To take additional funds of $20,000 out of the Corp. || take the || FMV Building – UCC Building = Recapture (if negative all in ABI) || Transaction Tax} {An entity who is registered to collect and remit the GST/HST. –
during the year at a HST inclusive cost of $56,500. The expenditure was for equipment that will be
funds out as salary so that she can max. her contribution to her RRSP. || to take the funds out as Div. because this || FMV Equip. – UCC Equip. = Recap. (if neg. all in ABI) if positive then Terminal Loss fully deductible|| Registrant} {Goods and services that are not subject to the GST/HST. - Exempt Goods used 60 % for the provision of fully taxable goods. HST was paid on the acquisition of all assets on
will reduce her CNIL balance for purposes of the lifetime Cap. gains ded. ||
[7] Customer List  || FMV List – Cost of List = Gain/(Loss) on list * 50% = Taxable gain (ABI) / CDA|| and Services} {Goods and services that are taxable at a zero GST/HST rate. Registrants which amortization is being taken during this period. || All of the Other Operating Expenses involved
ITA 85 (Non-Dep Prop): || 1) TCG= ½ *[Elected Value – ACB || 2) Shareholder Benefit (SB) = FMV of Total || CEC of List – [ (3/4)* [lesser of: cost or proceeds of customer list] = Recap. (ABI)|| who sell such goods are eligible for input tax credits. - Zero-Rated Goods And Services } the acquisition of fully taxable supplies and were acquired to assist in the provision of fully taxable
Consideration – FMV of Prop. ||3) Total Addition to NIFTP= TCG + SB || [8] Goodwill  || FMV Goodwill – Prev. Balance = Goodwill * 50% = Goodwill (ABI) || { A combined federal/provincial sales tax that is generally assessed on the same basis as the
4) ACB of Pref. Shares = Elected Value – ACB of Note (FMV) + SB ||
supplies. || Of the Salaries And Wages, 40 % were paid to employees involved in providing exempt
5) PUC Red. = Incr. in LSC, Less Excess of: (Total Elected) + Over the Non-Share Consideration || [9] Tax on ABI and Investment Income (different rates!) federal GST. – HST} {Any business or trade carried on by a person, or any supply of real services. | |Newfoundland participates in the HST program. The HST rate in the province is 13
Corp. Rate = 38% || Abatement = 10% || SBD = 17%|| GRR = 13% || Add. Refundable = 6.667%|| property made by a person. - Commercial Activity} {A tax based on the value added to a %. When the Quick Method is used in the province, the remittance rate is 4.4 % for a retail business
ITA 85 (Transfer of Shares): 1) PUC Red. = Incr. in LSC,Less Excess of: { (PUC and ACB of Subj. Share) + Over Refundable Part I Tax = 26.667% and 8.8 % for a service provider.||
the Non-Share Consideration} || 2) PUC New Shares = PUC of Old – PUC Red. || 3) Deemed Div (Non-Eli) = Incr. product at each stage of production or distribution by a particular entity. - Value Added Notes:
in LSC + *Non-Share Consideration, Less: {PUC and ACB of Subj. Share + PUC Red.} || [10] RDTOH = Open RDTOH + [ Least of: || 26-2/3% Of Investment Income Tax } { An amt, claimable by a registrant, for GST/HST paid or payable on goods or services Amort. Exp. does not affect the
4) TCG=1/2*[ Elected POD for Subj. Shares - Deem. Div - ACB of Subj. Shares] (* can be cash or note) || 26-2/3% * (TI - Amt Eligible SBD) || Part I Tax Payable ||] that were acquired or imported for consumption, use, or supply in the course of the HST Collected [(13%)($175,000)] $22,750
HST calculation.
ITA 84(3): Redemption of Pref. Shares: || 1) Deemed Div. (DD) = POR – PUC of Redeemed Shares || registrant’s commercial activity. - Input Tax Credit} {A provision that allows employees to Credits On Current Expenditures:
2) Adj. Deemed Div. = Deemed Div. – **Amt Deemed not to be a Div. {(DD – [(% of O/S)*Income since acq]} ||
a. Avail. Funds: b. Deemed Taxable Div.: recover the GST/HST paid on their employment related expenses.- Employee And Partner Purchases [(13%)($95,000 - $10,000)] ( 11,050) No HST is paid on salaries and
3) TCG = ½*[POR- Adj Deemed Div. – ACB] ** 55(2) = Div. is received in conjunction with dispo. of shares to Proceeds of Asset GST/HST Rebate} {A method of determining GST/HST amts payable or receivable that is Amortization Expense Nil
arm’s length. Div. was to red. The cap. gain that normally result from dispo. of shares. Fund for Distribution [1] wages, or interest. As a result no
+Marketable Security? Less: Paid Up Capital (PUC) avail. to registrants with annual GST/HST taxable sales, including those of associated Salaries And Wages Nil
Share Exchange: 1) PUC Red. = Incr. in LSC, Less Excess: { (PUC of C/S) + Over Non-Share Consi.} || 2) ACB
input tax credits are Avail..
+Cash not Purchased =Deemed Div. businesses, of $400,000 or less. Specified percentages are applied to the GST/HST inclusive Interest Expense Nil
Pref. Share= ACB of C/S – (Non- Share Consi. + Gift) || 3) Deem. Div. (Non-Eli.) = PUC of New Share + Non- +RDTOH
Considi. – PUC of Old Shares || 4) Adj Proceeds= {POD [84(d)] Laesser: FMV of Shares Given Up[a] || Non-Consi Less: Capital Div. Account (CDA) sales figures to determine the GST/HST payable or the refund. Input tax credits on capital Other Oper. Exp. [(13%)($35,000)] ( 4,550) Full input tax credits are avail. on
+ Gift [b] }, Less Deem. Div. || 5) TCG = ½ *[ Adj. Proceeds – ACB of Old Shares] || -Due to shareholders? = Deemed Taxable Div. (Non-Eligible) expenditures are tracked separately. - Quick Method} {Small Supplier Exemption: Small
Credits On Capital Expenditures capital expenditures other than
[a] % shares own * Share’s FMV [b] Gift = FMV of Shares Given Up – [ Cash Receive + Pref. Shares] -Accounts Payable Supplier Threshold : <$30,000 per year in taxable supplies || May Voluntarily Register : may [(13%)(100%)($56,500 ÷ 1.13)] ( 6,500) real property if more than 50 %
Limited Bump Up of Non- Dep Asset: 1) Excess = ACB of Shares – (a) Tax Val. of Net Assets at Wind.Up – Div - Income Tax Payble d. Tax. Cap. Gain on Disposition of Shares: want input tax credits. || Last 4 Calendar Quarters Test: Over $30,000 on cumulative basis ||
HST Payable $ 650 of their usage is to provide fully
Paid since acq. || 2) Non-Dep. Asset B-Up = FMV of Non-Dep. Asset at acq – Cost || (a) Total Equ. – Liab. = Fund for Distribution [1] Calendar Quarter :Over $30,000 in a single quarter. } {ETA 123 – “Supply” means the taxable supplies.
Fund for Distribution [1] provision of property or a service in any manner, including sale, transfer, barter, exchange,
Tax Conseq. Cash Distribution 1)Total Distri. = Avail Cash + Div. Refund (RDTOH Bal) || 2) Deem.Div. = Total c. Deemed Taxable Div.:
Distri. – PUC || 3) Div. Subj. to Tax = *Deem.Div. – CDA (Election) || 4) Deem. POD = Total Distri. to Shareholder Less: Deemed Div. license, rental, lease, gift, or disposition.} Kole’s HST included taxable sales of $197,750 [(113%)($175,000)] is less than $400,000
– Deem.Div || 5)TCG = Deem. POD – ACB of Shares || * Subj. to Eli./Non-Eli. Div. Tax Fund for Distribution [1] = Proceeds of Disposition
Streamlined ITC Accounting: Input tax Cr. based on a multiplier applied to most and it is not engaged in an ineligible business such as accounting, Kole can use the Quick
Less: Paid Up Capital (PUC) Less: Original Cost of Shares
ITA 84.1: Avoiding Deemed Div. take back max. non-share consideration (ie boot) higher of: purchases: GST/HST Rate ÷ 100 + GST/HST Rate Method. The Quick Method calculations would be as follows:
=Deemed Div. = Capital Gain * 50% = Taxable Capital Gain
a)PUC or b) ACB Less: Capital Div. Acct (CDA) Employee/Partner GST/HST Rebate Calculation: Multiply eligible expenses by GST/HST Basic Tax [(4.4%)(113%)($175,000)] $8,701
ITA 87 – Amalgamation: The effect on Rollover: = Deemed Tax. Div. (Non-Eligible) f. Tax Payable: Rate ÷ 100 + GST/HST Rate || Rebate is a refund of GST/HST paid on costs that were Credit On First $30,000 [(1.0%)($30,000)] ( 300) Note: Cap. Expenditures
Asset Rollover @ Corp. Tax(Fed+Prov) Payable (on Incr. Tax. Income) deducted for income tax purposes || Rebate is added to income or ded. from UCC in the year Total Before Capital Equipment
e. Tax on Incremental Income: it is received  New Housing Rebate: GST/HST paid at usual rate|| Rebate Avail. equal to
Inventory Cost Less: (Fed + Prov) DTC [{(13/18) + ? }* gross-up] Expenditures $8,401 Building
Deemed Taxable Div.(Non Eligible) =Tax Payable 36 % of GST paid || Maximum = $6,300 [(5%)($350,000)(36%)] || Phase out provision ||If
Dep. Cap. Property UCC Input Tax Credit On Capital Expenditures
Gross Up (18%) harmonized: provincial rebates vary  [A][($450,000 – B) ÷ $100,000]
Non-Dep. Cap. Prop. ACB [(13%) (100%)($56,500 ÷ 1.13)] ( 6,500)
=Grossed Up Div. A = The lesser: 36% of the GST paid and $6,300 [(5%)(36%)($350,000)]
Eligible Cap. Prop. 4/3*CEC g. Cash Retained After:
+ Taxable Capital Gain Fund for Distribution [1] – Tax Payable B = The greater: $350,000 and the cost of the home HST Payable $1,901
= Incremental Taxable Income
 Ex) Testamentary Trust ITA 70(6)(b): Chris Jill passed away On January 31, 2015, his Reversionary Trusts - Attribution to settlor: If the transferred property can revert to Ex)In 2014, the Empire partnership had accounting income of $234,000. Michelle has a 35%
Ex) Partnership Income Allocation Withdrawal of Partner: will came into effect and as a result all of his property was transferred to a testamentary settlor || If the settlor can determine the persons that will receive the transferred property interest in a partnership. In determining this figure, the following items were deducted:
Revenues $1,555,400 trust. The trust will have a Dec 31 year end. The transferred property is as follows: ||The transferred property cannot be disposed of except with transferor’s consent Partner salaries of $68,000. || Salaries to her spouse of $12,000 (he does the
Non-Eligible Div. Rec. Canadian Corp. 70,400 Adj. Cost Base: Salaries to partner/ Interest on partner contrib. : No deduction || Add to accting income|| accounting for the partnership). || Interest on capital contributions of $11,000. ||
114,400 Initial Capital Contrib.

at a deemed capital cost of $1,100. However, for purposes of calc. CCA and recapture,
Ex) A gift of depre. Cap. property is made to an inter vivos trust in favour of the settlor’s
adult children. The capital cost of the depreciable property to the settlor was $1,000. On
the date of the gift, the UCC was $750 and the FMV was $1,100. || The settlor’s deemed
POD of the FMV of $1,100, and will record a TCG = $50 [(1/2)($1,100 -
$1,000)]. Recapture of CCA of $250 ($1,000 - $750). The trust acquires the property
Treat as return of capital or allocation of income || Interest on partner loans is ded. – No adj.

the ITA 13(7)(e) rules for non-arm’s length transactions apply and the value will be
Gain On Sale Of Shares Of Canadian Public Corp. Tax Cost FMV Jan 31/15 Personal exp. of the partners of $18,000. || Charitable contributions of $23,000. ||
+Additional Cap. Contrib. Portfolio Investments $420,000 $646,500 Dividend income: Full AMT of dividends included in partnership income (but not gross up)|| Partnership Income=[(35%)($234,000+$68,000+$11,000 + $23,000 + $18,000)] =$123,900
Total Revenues $1,740,200
-Drawing from Partnership GIC 172,500 172,500 Flowed through to partners as dividends ||Partners gross up and claim dividend tax credit||
Expenses: Ex)Hussle and Greckle are equal partners in Harbour Partnership. Each partner has
+Share of Net BI Rental Property:
Added to accounting income to get partnership business income  Taxable capital G/(L):
Salaries To Staff ($629,200) Land 192,000 237,750 contributed capital of $60,000 to the partnership and this is also their ACB for the
+Share of Cap. Gains Included in partnership income || Partners can also deduct reserves|| Added to accounting
Office Rent ( 140,800) Building (Cost = $255,000) 207,000 369,000 partnership interest. Trek will join the partnership as an equal partner. || If Trek pays
+Share of Charitable Don. income to get partnership business income  Political Contributions/ Charitable
Office Supplies ( 57,200) $20,000 directly to each of the original partners, the ACB of the partnership interest of both
Adj. Cost Base [1] Income+Exp. amts were recorded by the trust:
Donation: Not Avail. to partnership||Flowed through to partners|| Added to accounting
CCA On Office Equipment ( 63,800) Hussle and Greckle would decrease by $20,000 each. Each partner is selling one third of
Eligible Div. Rec. From Canadian Corp $ 24,000
Charitable Donations ( 138,600) TCG = ½*(POD -ACB[a]) income to get partnership business income  Expenses of partners: Partnership may pay their $60,000 interest. This will reduce their ACB by $20,000 [(1/3)($60,000)].||
Interest On GICs 5,175
Drawings By Jessica ( 319,000) [a]
ACB[1] -(Legal+ACCT fees) personal expenses of partners || Not deductible to partnership || Not in partner’s income –
Net Rental Income: Ex)In 2014, Andrea, who is 82 years old, transfers property with an ACB= $400 and a
Drawings By Diana ( 336,600) ( 1,685,200) treated as a withdrawal || Added to accounting income to get partnership business income
Rental Revenues $40,125 FMV=$750 to an inter vivos family trust to benefit his 3 adult children. In 2015, he
Net Income (Accounting Values) $ 55,000 Rental Expenses Other Than CCA (9,000) [Transfers Of Property - No Rollover Provision : Partner to partnership  Partner: becomes seriously disappointed with his two sons, and decides to transfer the property to his
CCA Claimed (6,750) 24,375 disposition at FMV ||Partnership: acquisition at FMV || Partnership to partner  Partner: daughter and wind up the trust. At this time the FMV of the property has increased to
For the year ending December 31, 2014 the partnership included an amt of $215,600 of work- acquisition at FMV ||Partnership: disposition at FMV ] Partner to Partnership Rollover - $800,000. For both transactions, Andrea uses any rollovers that are Avail. to minimize the
in-process in the accounting revenues for that year. For the current year, the Revenues include Total Income (Jan31 to Dec 31 2015) $53,550 ITA 97(2)-Transfer to Canadian partnership with an election by all partners : tax consequences. || In 2014, there will be no rollover Avail., and Andrea will include a
the December 31, 2015 balance of work-in-process of $510,400. While the Chark sisters have
Trust agreement: || Income= 25% to Jasmine and 65% to Louis. Disposition and Aquisition at elected value (usually tax value)  Partnership to TCG= [(1/2)($750 - $400)] $175 in income. In 2015, when the trust transfers the property

$1,050 [$1,000 + (1/2)($1,100 - $1,000)]. ]

chosen to include work-in-process as revenue in their accounting statements, they have elected Partnership Rollover - ITA 98(6): Automatic (no election required) || Must include all to his daughter, there will be a rollover Avail., and the trust will not report any income.||
The remaining income will be retained by the trust to be
under ITA 34 to exclude these amts from their tax calculations. property || All partners must have been in old partnership ||ITA 98(6) views the old and new
distributed at the discretion of the trustees. No discretionary Ex)Tezuki is a partner in the Wonder Partnership. She has some vacant land that is in a
Net Income As Per Income Statement $ 55,000 distributions were made during 2015.||| partnerships as the same partnership  Partnership to Proprietorship Rollover applies
Add back to Net Income: automatically if: within 3 months of the end of an old partnership || one partner continues to perfect location for a building the partnership wants to construct. She transfers the land to
Additions: Tax Consequence to Christopher death: the partnership in exchange for $107,000 in cash. The land cost her $47,000 and has a FMV
Previous Year End WIP $ 215,600
+Amortization carry on the business as a sole proprietor.||  ITA 85(2) allows rollover of partnership
there would be a deemed disposition of his capital property: property to a Corp.  ITA 85(3) allows rollover of corporate shares to partners for their of $97,000. ||ACB of her partnership interest decreases by $10,000. [$107,000-$97,000] ||
Charitable Donations 138,600 Deduct to Net Income:
Drawings By Partners 655,600 1,009,800 Cap. Gain On Portf. Invest. ($646,500 - $420,000) $226,500 interests  ITA 85(3) rollover is automatic if: The corp. is a taxable Canadian Corp. || Ex)Denise is planning to create a testamentary trust. She has the following options: the
-Max. CCA
Capital Gain On GIC Nil The partnership is wound up within 60 days of the transfer || Immediately prior to the wind beneficiaries will be only her common-law partner Belinda, only their 12 yr old blind
$1,064,800 Capital Gain On Land ($237,750 - $192,000) 45,750 up, the partnership only holds money or assets received from the Corp.  Rollovers to a
Deductions: *the rest are the same!! daughter Elena, or both Belinda and Elena equally. The non-depreciable property she will
Capital Gain On Building ($369,000 - $255,000) 114,000 Capital Beneficiary: Transfer at trust’s tax cost  Exceptions: Spouse or partner trust || transfer to the trust has an ACB=$55,000 and FMV=$85,000. She wants to defer the
Current Year End WIP ($510,400) Alter ego trust ||Joint spouse or partner trust  Net Income Adjustments - Deductions
Dividend ( 70,400) Total Capital Gains $386,250 taxation of the capital gain on the transferred property until it is sold by the
Taxable Capital Gains (50%) $193,125 avail. for: Amts paid or payable to beneficiaries || Trustee’s or executor’s fees || Amts paid beneficiary(ies). || Denise should transfer the property to her partner trust. [ || Items that can
Capital Gain ( 114,400) ( 695,200) by the trust on behalf of beneficiaries Preferred Beneficiary Election : Income retained
Recapture On Building ($255,000 - $207,000) 48,000 be allocated to beneficiaries of a trust: || Recapture of CCA on the disposition of trust
Net Business Income $369,600 in trust, taxed in hands of beneficiary || -Only applicable to beneficiaries: Who are eligible depreciable assets. || Gains resulting from the disposition of trust capital property. ||]
Total Income In Final Tax Return $241,125 for the disability tax credit; or Can be claimed as an infirm defendant over 17||  Amts
deemed not to be paid: A distribution that is taxed in the trust rather than in the hands of Ex)Warsame operates a small pet store in Saskatchewan. The provincial sales tax is 5 %
The Income allocated $184,800 [(0.5)($369,600)] to each. Allocated Taxable Income: and it is a non-participating province. The store had fully taxable purchases of $280,000
Jasmine (25%) Louis (65%) Trust (10%) the recipient beneficiary. Reasons for using: Lower rates|| Avoidance of instalments ||
Donations Each sister would be allocated $69,300 in charitable donations. This would Use of trust losses|| Amts retained for a beneficiary under 21 years of age :Retained and purchased capital items (not including real property) with a cost of $15,000. This store
entitle each of them to a federal credit of $20,069 [(15%)($200) + (29%)($69,300 - $200)] Eligible Div.s Received $ 6,000 $15,600 $2,400 in the trust but taxed in the hands of the beneficiary || Beneficiary must be under 21 during uses the streamlined method of accounting for input tax credits. Both amts include PST
assuming this is their only charitable donation. [Deduct on 1ST day of the following fiscal yr] Gross Up (24,000*38%) 2,280 5,928 912 the year ||Amts must vest irrevocably with the beneficiary. Income Allocations to and GST. Input tax credit to claim = 14,048 [(5/105)($280,000 + $15,000)]
Interest On GICs (5,175) 1,294 3,364 518 Beneficiaries: To be deductible, amts must be paid or payable Not considered payable Ex) The interest PMT made to a non-resident would be subjected to Part XIII
Dividends Each of the sisters would be allocated $35,200 [(50%)($70,400)] of non-eligible Net Rental Income ($24,375) 6,094 15,844 2,438 withholding tax: If Jerry is a resident of a country that does not have a tax treaty with
if: A beneficiary can only enforce PMT of an amt of income by forcing the trustee to wind
Div.s. For inclusion in the tax returns, this would be grossed up to $41,536 Net And Taxable Income $15,668 $ 40,736 $6.268 Canada, earns $25,000 on a loan to Gelato Limited, a CCPC. Jerry owns 40% of the shares
up the trust. || The beneficiary’s right to income is subject to the approval of a third party.
[(118%)($35,200)]. The Federal Div. tax credit of $4,576 [(13/18)(18%)($35,200)]. in the company. Note that U.S. residents are not liable for Part XIII tax on interest.
||PMT of income is at the trustee’s discretion. ||The beneficiary has the power to amend the
{Added on the 1st day of the following fiscal year (no gross up for this purpose)} Federal Tax Payable for the Trust: trust deed and must do so to cause the income to be payable. Ex)Levi is a resident of the US, living in Michigan. He works and earns income in Canada
Federal Tax Payable Before Credits [(15%)($6,268)] $940
Taxable Capital Gains Each sister would have TCG of $28,600 [(50%)($114,400÷2)]. Federal Div. Tax Credit [(6/11)($912)] (497) Residence of Corp.s  Incorpor. In Canada After April 26, 1965- Deemed Resident || all year as follows: || Employment income=$9,500 ||Business income = 30,000 || Capital gain
{ Full amt added (net amt if losses) on the 1st day of the following fiscal year } Incorporated In Canada Before April 27, 1965 -Deemed Resident If: Was Resident At from disposition of vacant land in Canada =10,000 || Interest income on bank account in
Federal Tax Payable $ 443
Any Time or Carried On Business In Canada  Incorporated Outside Of Canada :Mind Canada=500 || Income under Part I of the ITA =$35,000 [$30,000 + $5,000]. The
Ex) Limited Partnership  Federek Jonas has an obsession for cookies. On January 1,
Income that remains in a testamentary trust is taxed in the same general manner as would be applicable And Management Of Company  Canada/U.S. Tax Treaty: If resident of Canada and employment income is exempt from taxation in Canada as it is less than $10,000.
2015, he decided to acquire a 6 % limited partnership interest in the World’s Most Amazing
Cookie Partnership. As a result of the partnership, he has agreed to pay $20,000 for his to an individual. However, the trust would not be able to use personal tax credits under ITA 118 to U.S.Will be deemed to be a resident of the country in which it is incorporated  Non- Ex)Trent is the sole beneficiary of an inter vivos trust. During 2015, the trust had the
reduce the amt of Tax Payable. Resident Corp.s are liable for Canadian source income from: ||Business| Capital Gains on following income: Capital gain from share sale =30,000 || Eligible Div.s from publicly traded
interest in the Partnership with $5,600 paid in cash and he signed an interest free promissory
note for the remaining balance. The promissory note is payable in five equal annual Ex) Inter Vivos Trust ITA 73(1.01)(c)(i): The trust agreement allows the trustees do decide on the the disposal of “Taxable Canadian Properties”||  Taxable Canadian Propery: 1. Real Canadian corp. =$ 70,000 ||Non-eligible div. from a family owned CCPC = 317,000 ||The
instalments of $2,880, due on December 31 of each year, beginning in 2015. In addition, the percentage of each type of the trust’s income that will be distributed each year. During the year ending property located in Canada 2. Property used to carry on a business in Canada (including non-eligible Div.s and capital gain are distributed to Trent.
agreement states that the general partner will acquire Federk’s partnership interest on December 31, 2015, the following amts of income were earned by the assets in the trust: eligible capital properties and inventory) 3. Shares of Canadian resident private Corp.s 4. Income Increase= Non-eligible Div.s received + Gross-Up on Non-eligible Div. + TCG
December 31, 2017, for $2,800 more than its FMV. Federk’s share of all income and losses Eligible Div.s Received From Canadian Corp.s 64,000 Shares of Non-resident private Corp.s, if at any time in the last 60 months, the FMV of the = 317,000 + [($317,000)(18%)] + [(1/2)($30,000)]= $389,060
of the Partnership is 6%. For the year ending December 31, 2015, the Partnership had the company’s real and resource properties made up > than 50% of the FMV of all its
Interest From Canadian Sources $ 37,000
properties 5. Shares of any public Corp.s, if at any time in the last 60 months, the taxpayer Ex)Mr. Hudson’s 23 year old daughter, Lianna, is the sole beneficiary of the Hudson family’s
following sources of income and loss: Capital Gains 86,000 trust. This trust is an inter vivos trust. During 2015, the trust has the following activities:
Business Loss ( 270,000) owned ≥ 25% of the shares of any class 6. Partnership interest, if at any time in the last 60
Net Rental Income (After CCA Ded. Of $4,300) 39,000 Receives Int. income of $150,000. || Charitable Donation of $10,000 || Distributes $75,000
Ex) Jan 1/15, Derek acquires a 5% interest in a limited partnership for $150. Ian pays an immediate
deposit of $75 with the bal. due in 2017. For the year ending Dec 31/14, the partnership determines that

Ex) A gift of non-dep. capital property is made to an inter vivos trust in favour of the settlor’s adult

TCG = $250 [(1/2)($1,500 - $1,000)]. The trust will record the property at deemed cost = FMV= $1,500.
children. The ACB of the property to the settlor was $1,000. Its FMV on the date of the gift is $1,500.

months, > than 50% of the partnership’s value was derived from Taxable Canadian Property
it has a $25 cap. gain and a $60 business loss. At-risk AMT = [$150,000 + (5%)($25,000) - $75,000]

Capital Gains 26,250 Total Trust Income $226,000 to Liana || Liana has no income other than what she receives from the trust, and is eligible
Interest Income 30,000 U.S./Canada Tax Convention : Income taxable if a permanent establishment || Excludes only for the personal tax credit. The federal Tax Payable for the trust for 2015.:
Non-Eligible Div. Rec. From Canadian Corp. $ 18,000 During 2015, the trustees distributed all of the interest to Melanie, as well as 60% of the cap. gains, certain facilities (e.g., storage facility) || An agent who can conclude contracts is viewed as Charitable donation tax credit = [(15%)($200) + (29%)($9,800)] = $2,872
Div.s, and net rental income. Melanie is a full time student for 12 months during 2015 and her a permanent establishment.  Employment Income ITA 2(3) – Non-residents taxed on
 The settlor has deemed POD of the FMV = $1,500. The settlor will be subject to tax on a

At-Risk Amt Dec 31/15: Trust TP = [(29%)($150,000 - $75,000) - $2,872 = $18,878

tuition for the year was $12,500. She is a full time resident of Alberta and has no other source of employment income earned in Canada  ITA 115(2) – Deemed employment income || Non-
ACB - December 31, 2015 $20,000 Ex)In 2013, Paul transferred property with ACB=$400 and FMV=$750 to alter ego trust.
income during this year. Taxable Income for both: residents remunerated from a Canadian source || Non-residents receiving signing bonuses for
Add: Share Of Income (Not Losses) 2015 The will bequeaths all property to the son. At his death 2014, the new FMV=800. Paul uses
Trust (40%) Melanie(60%) work to be performed in Canada US/CDN Tax: $10k rule – no tax if < $10k || 183 day rule
[(6%)($18,000 + $26,250 + $30,000)] 4,455 any rollover to min. tax consequences.|| In 2013, a rollover would allow Paul to transfer his
$1,200. The settlor has deemed POD of the FMV=$1,100 therefore recapture= 300
Ex) A gift of depre. capital property is made to an inter vivos trust in favour of the

(1,100-800). The asset is recorded in the trust records at the settlor’s cost of $1,300,
with deemed CCA =$200, resulting in a UCC of $1,100 (1,300-200). When the
settlor’s adult children. At the time of this transfer, The capital cost =1,300 |UCC=

beneficiary. On the date of distribution, the property has a UCC= $900 and FMV=

transfer. The beneficiary will be deemed to have acquired the property for the UCC
the UCC at the date of distribution of $900, resulting in no gain or loss on the
$800 | FMV= $1,100. At a later time, the property is distributed to a capital

amount of $900. However, the beneficiary will have a capital cost of $1,300 for
asset is transferred to the capital beneficiary, the deemed proceeds to the trust will be

Interest Income Nil 37,000 Partnership Or Trust Interest and Private Company Shares :If, any time in preceding 60 property to the trust tax free. The deemed proceeds for the settlor (Paul) at tax cost=$400,
Subtotal $24,455 Taxable Capital Gains: months, > 50% of FMV from certain properties, including taxable Canadian property
Amts Owed To Partnership ($14,400 - $2,800) ($11,520) resulting in no gain or loss on the transfer. The trust acquires the property at a deemed
[($86,000)(1/2)= 43,000 ] 17,200 25,800 Public Company Shares – any time in the preceding 60 months: At least 25% shares
Other Amts That Reduce Risk ( 2,800) cost of $400. In 2014, when the trust transfers the property to his son, the trust will include
Eligible Div. Received 25,600 38,400 owned by non-resident and/or related non-arm’s length persons, and > 50% of shares FMV
At-Risk Amt - December 31, 2015 $ 10,135 a TCG= $200,000 [(1/2)($800 - $400)]||
Gross Up On Div.s: from certain properties, including taxable Canadian property
[($64,000)(38%)= 24,320] 9,728 14,592 Ex) Jane has operated a business for 30 yrs and has accumulated securities that earn interest
U.S./Canada treaty limits to: Real property in Canada || Property that is part of a permanent
The agreement effectively guarantees a value of no less than Net Rental Income: 15,600 23,400 income of $40,000/yr. Her other sources of income places her on the top bracket for
establishment ||Investments whose value is primarily attributed to real property in Canada
$2,800, even if the market value of the partnership interest is personal tax. Her son (22 yrs old) has no income for tax purposes and only tax credit avail
Nil, this amt is not at risk and reduces the at-risk amt. Taxable Income $68,128 $139,192 Part XIII Tax: Non-residents earning Canadian source employment income, business for him is basic personal. If Jane transfers the interest from the securities to a trust with her
income, or capital gains on taxable Canadian property are taxed under Part I || Property
subsequent recapture and capital gains calculation purposes.

Limited Partnership Loss for the year: The Tax Payable for the trust: son as beneficiary the fed. taxed saved = {(29%*40,000)-[(15%)*(40,000-11,138)]}=7,271
Taxable Income $68,128 income (interest, rents, royalties, and dividends) are subjected to tax under Part XIII ||
Share Of 2014 Business Loss [(6%)($270,000)] ($ 16,200) Ex) Mandy borrows $250 and invests it a Canadian rental property. It produces gross rental
Federal Tax Rate (Inter Vivos Trust) 29% General rate is 25% || Assessed on gross amt of income received – no deductions||
At-Risk Amt - December 31, 2015 10,135 income of $36. The interest costs on loan totals $3, and other exp. of operating the property,
Federal Tax Payable Before DTC $ 19,757 Divided U.S./Canada tax treaty : Rate to 5% if U.S. recipient is a Corp. and owns 10 % or incl. max. CCA, total $10. Rental income under : Part I = 23 (36-10-3) || Part XIII = 36
Limited Partnership Loss For 2015 ($ 6,065) Div. Tax Credit [(6/11)($9,728)] ( 5,306) more of payor || Rate to 15% for other dividends to U.S. recipients
Ex)Tara is a real estate agent her HST= 13%. She earns commission income, and pays her
Federal Tax Payable - Trust $ 14,451 Royalties U.S. /Canada Tax Treaty: Reduces rate to 10% || Reduces rate to nil for
Deductible for the year (2015): employment related expenses herself. Tamara has claimed the following expenses on her T777
copyright and computer software royalties.  Rents : If in rental business – Part I applies ||
Share Of 2015 Business Loss [(6%)($270,000)] ($16,200) – Statement of Employment Exp. for 2014: Office Supplies (100 %) =$1,100|| Auto. gas and
The Tax Payable for Melanie would be calculated as follows: If not, Part XIII is assessed at 25%  Retirement related benefits- subject to Part XIII ||
Limited Partnership Loss For 2015 6,065 Tax On First $44,701 $ 6,705 maintenance (87%)= 4,176 ||Auto. insurance (87 %)=3,132|| CCA on car (87%)=5,791
Can also elect to be taxed under Part I  U.S./Canada tax treaty: Rate reduced to 15% for
Deductible Loss For 2015 ($ 10,135) Tax On Next ($89,401 - $44,701) At 22% 9,834 Tara’s Employee HST Rebate=1,273 [(13/113)($1,100 + $4,176 + $5,791)]
periodic PMTs || In general, OAS and CPP received by U.S. residents will only be taxed in
Tax On Next ($138,586 - $89,401) At 26 % 12,788 the U.S. Quick Method: <$400,000 Taxable Sales|| Collect Usual GST/HST || Don’t Ex) Danielle is a U.S. citizen who lives in US. She is employed 2 days/week in Calgary
Limited Partneship LCF: $6,065 at the end of 2015. Tax On the Remaining Income at 29% 176 Track ITCs, except for capital expenditures || Apply Given % to GST Inclusive Sales (Varies During the current year, she is paid $15,000 (CDN) for this work. In addition, she maintains
ACB -Dec 31/15 to Jan 01/16: Federal Tax Before Credits $29,503 By Province) || 1% credit on first $30,000 a savings account at a bank in Windsor. This account earned interest of $1,500 during the
ACB - December 31, 2015 $20,000 NRTC: Personal $11,327 current year. ||In Canada for less than 183 days but she earned more than $10k CND so she
Foreign Investment Reporting Rules: Canadians are required to declare foreign property in will be taxed. The interest, it is an arm’s length pmt and does not involve participating debt,
Share Of Partnership Income For 2015 Tuition excess of $100,000. [Foreign Property: • Life insurance policy you own from a foreign issuer Part XIII tax is N/A. Note that the CDN/US tax treaty has a provision which does not allow
[(6%)($18,000 + $26,250 + $30,000)] 4,455 12,500 • Interest you own in any offshore mutual funds • Any real estate you own held outside Canada either country to assess taxes on interest paid to residents of the other country.” ||
Loss Deducted For 2015 ( 10,135) Education[($400)(12)] 4,800 • Money in a foreign bank account • Shares you own of a foreign company • Interest you hold Ex)A transfer of non-dep. capital property is made to spousal testamentary trust. The cost
ACB - January 1, 2015 $14,320 Textbook [($65)(12)] 780 in a non-resident trust • Bonds or debentures owned from foreign countries • Income you earn of the capital property = $1,000, and FMV = $4,500 at transfer. At the time of his death, the
$29,407 * 15%= (4,411) from foreign property.] [ Foreign property you can exclude: • Any property you own primarily decedent had net capital LCF in excess of $5,000. || Under ITA 70(6) rollover provision, the
At-Risk Amt on Jan 01/16 : $10,135 - $10,135 = NIL Div. Tax Credit [(6/11)($14,592)] ( 7,959) for personal use, incl. your automobile, cottage, paintings and jewelry • Any property you use deemed proceeds to the decedent is the property’s cost=$1,000, resulting in no G/(L) on the
Ex) Sarah has a 50% interest in a partnership that was acaquired on Jan 01/14 at $40,000. Federal Tax Payable - Melanie $ 17,133 for running a business like a building, equipment and inventory.] note: FMV not relevant! transfer. An alternative is to elect out of ITA 70(6) and transfer the property at its
The Net Business Income (BI for tax purpose) on Dec 31/14 was $50,000 that included CCA Only Inter Vivos - ITA 73(1.01)(c)(ii) Ex)The Tiasco Partnership was formed in 2014.The partnership agreement, each of the two FMV=$4,500. The LCF is used to eliminate the tax on the resulting TCG =$1,750
ded. Of $36,000 but did not incl. TCG of $10,000 realized by The individual is entitled to receive all of the income of the trust that arises before the partners has an equal share in this income. Yr ending is Dec. 31/15, the partnership had an [(1/2)($4,500 - $1,000)]. Under ITA 70(6) rollover provision, the trust would record the
the partnership. During 2014, Sarah w/drew $15,000 from the partnership. individual's death, and no person except the individual may, before the individual's death, income of $580,000. ||Amort. Equip. of $48,000 (equal to CCA) || Non-eligible Div. received property at the decedent’s cost of $1,000. If the FMV election is made, the spousal trust will
Sarah’s ACB= Open ACB - Drawings + share of BI (no CCA adj) + Share of TCG receive or otherwise obtain the use of any of the income or capital of the trust. of $28,000 || Gains on the sale of shares of $86,000|| Charitable donations of $8,000 || have acquired the property at a deemed cost of $4,500. This higher value will serve to reduce
ACB= 40,000-15,000 + (50%* 50,000) + ((50%)(2)(10,000)) = 60,000 Taxable Income=(50%)*[$580,000+(18%)($28,000) - (1/2)($86,000) + $8,000] =$275,020 any future gain on the property when it is sold.