Tax Alert Archives May 2016

CRA considers that the ACB grind under subsection 84.1(2.1) applies notwithstanding a taxpayer’s intention not to claim a capital gains exemption

In 2015-0594461E5, the CRA indicated that a taxpayer’s intention not to claim a capital gains exemption is irrelevant to the application of the ACB grind under subsection 84.1(2.1) of the Income Tax Act (Canada) which deems a taxpayer to…

Prepared by: Florence Sauve

Florence Sauve is an associate practicing in the firm’s Toronto office. Her practice focuses on all aspects of taxpayer representation and tax litigation and also includes personal and corporate tax planning. Before joining Thorsteinssons LLP, Florence clerked at the Tax… more »

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CRA confirms deductibility of interest on funds borrowed to finance share repurchase under “fill-the-hole” theory

Paragraph 1.48 of Folio S3-F6-C1 provides that an interest expense on borrowed money used to redeem shares or return capital may be deductible if the borrowed money replaces capital previously used to earn income from a business or property.…

Prepared by: Florence Sauve

Florence Sauve is an associate practicing in the firm’s Toronto office. Her practice focuses on all aspects of taxpayer representation and tax litigation and also includes personal and corporate tax planning. Before joining Thorsteinssons LLP, Florence clerked at the Tax… more »

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CRA indicates that deduction of foreign non-business tax paid by partnership is available to indirect individual member

In 2015-0572461I7, the CRA indicated that a Canadian resident individual who holds shares in disregarded LLCs through a Canadian LP and a US LP that has elected to be treated as a corporation for US tax purposes is entitled…

Prepared by: Florence Sauve

Florence Sauve is an associate practicing in the firm’s Toronto office. Her practice focuses on all aspects of taxpayer representation and tax litigation and also includes personal and corporate tax planning. Before joining Thorsteinssons LLP, Florence clerked at the Tax… more »

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CRA confirms deductibility of professional fees incurred to defend taxpayer’s position after acceptance of voluntary disclosure

Paragraph 60(o) of the Income Tax Act (Canada) allows a taxpayer to deduct professional fees “incurred in preparing, instituting or prosecuting an objection to, or an appeal in relation to, an assessment of tax […]”.  The CRA recently confirmed that…

Prepared by: Florence Sauve

Florence Sauve is an associate practicing in the firm’s Toronto office. Her practice focuses on all aspects of taxpayer representation and tax litigation and also includes personal and corporate tax planning. Before joining Thorsteinssons LLP, Florence clerked at the Tax… more »

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