Payment & Receipt

Cases

Canada v. Innovative Installation Inc., 2010 DTC 5175 [at 7317], 2010 FCA 285

In order to ensure payment of a loan owing by the taxpayer ("Innovative") to a bank (RBC) on the death of Innovative's principal (Mr Peacock),...

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Words and Phrases
receive
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account receipt of insurance proceeds through debt repayment 156

Wannan v. Canada, 2003 DTC 5715, 2003 FCA 423

The quantum of the taxpayer's liability under s. 160 turned upon whether a bankruptcy dividend received by the Crown from the trustee in...

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Banner Pharmacaps NRO Ltd. v. Canada, 2003 FCA 367, 2003 DTC 5642 (FCA)

The wholly-owned Canadian subsidiary of the taxpayer declared a dividend, with the resolution stipulating that the dividend was "to be payable by...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(j) dividends recognized on cash basis 117
Tax Topics - Income Tax Act - Section 133 - Subsection 133(8) - Non-Resident-Owned Investment Corporation dividend received when note issued/such note not a money-lenidng business 227

Canada v. Gillette Canada Inc., 2003 DTC 5078, 2003 FCA 22

The replacement of a French-franc note by a Canadian-dollar note with an equivalent principal amount did not give rise to a payment or crediting...

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Hickman Motors Ltd. v. Canada, 97 DTC 5363, [1997] 2 S.C.R. 336

In connection with finding that the taxpayer had generated revenues, which were not reflected in its financial statements, from holding leasing...

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Piché v. MNR, 92 DTC 5295 (FCA)

Interest owing to the taxpayer as a result of the acceptance by his co-shareholders of his offer to sell his shares in a corporation, was found to...

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The Coppley Noyes & Randall Limited v. Her Majesty The Queen, 91 DTC 5291, [1991] 1 CTC 541 (FCTD), varied on appeal 93 DTC 5196, 5508 (FCA).

The taxpayer's practice, in determining its allowance for doubtful accounts at the end of its taxation year on November 27, 1082, included having...

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Minsham Properties Ltd. v. Price, [1990] BTC 528 (Ch. D.)

Although "there can be no doubt that a book entry can constitute payment" (p. 540), in the case of an informal loan from the taxpayer's parent...

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Cumberland Properties Ltd. v. The Queen, 89 DTC 5333 (FCA)

On November 24, 1980 the Department of Supply and Services issued a refund cheque to "Cumberland Properties Ltd. c/o John Church", which was the...

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C. & E. Commissioners v. Faith Construction Ltd., [1989] BTC 5121 (C.A.)

In response to the proposed repeal effective 1 June 1984 of the zero rating of building alteration services, four building companies with existing...

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Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 341 - Subsection 341(1) 120

Parkside Leasing Ltd. v. Smith, [1985] BTC 25 (HC)

Interest paid by cheque was not received on the date that the cheque was received. Instead, the interest was not received until either the date...

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Narich Pty. Ltd. v. Commissioner of Pay-roll Tax, [1984] BTC 8019 (PC)

An argument was rejected to the effect that fees received by employees of a company were not wages because they were collected directly from...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) 74

Western Union Insurance Co. v. The Queen, 83 DTC 5388, [1983] CTC 363 (FCTD)

The sending of a cheque by the lender to (its) solicitors did not constitute the payment of a sum to the borrower.

The Queen v. Ans, 83 DTC 5038, [1983] CTC 8 (FCTD)

A company's shareholder was held to have received a bonus when the amount of the bonus payable by the company was credited against the balance...

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Mendels v. The Queen, 78 DTC 6267, [1978] CTC 404 (FCTD)

The taxpayer was partner with another dentist in the partnership for their professional practice and tey also jointly owned a corporation (the...

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The Queen v. Canadian-American Loan and Investment Corp. Ltd., 74 DTC 6104, [1974] CTC 101 (FCTD)

The taxpayer, which operated a boat storage business in a storage building, subleased a portion of the leased premises to an affiliate...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) 81

Blauer v. MNR, 71 DTC 5113, [1971] CTC 154, 71 DTC 5113 (F.C.T.A.), briefly aff'd 75 DTC 5076, [1975] CTC 112 (SCC)

A post-dated cheque was payable for purposes of ss. 12(1)(l) and 76(1) on its date rather than the date of delivery.

Hall v. MNR, 70 DTC 6333, [1970] CTC 510 (Ex Ct), briefly aff'd 71 DTC 5217 (SCC)

An individual following the cash method for the recognition of interest income received interest represented by interest coupons on the due dates....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) sale of matured interest coupons gave rise to interest receipt or amount in lieu 194

Robwaral Ltd. v. MNR, 60 DTC 1025, [1960] CTC 16 (Ex Ct), briefly aff'd 64 DTC 5266 (SCC)

A dividend was "received" by a shareholder in the year in which the cheque was drawn and received by him, rather than in the previous year in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 90 - Subsection 90(1) 65

Flinn. v. MNR, 3 DTC 1157 (Ex Ct)

Dividends on preference shares of a corporation, including those held by the taxpayer, were substantially in arrears. The corporation declared a...

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See Also

Markou v. The Queen, 2016 TCC 137

A Quistclose trust (as described by C. Miller J ) provides an equitable remedy to a lender where it has lent to a borrower for a specific purpose...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) TCC had jurisdiction to determine that no lender equitable remedy (under Quistclose trust doctrine) attached to leveraged donation advances 425
Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 TCC has jurisdiction to determine existence of equitable remedy 96

M. Soutar Decor 2000 Ltd. v. The Queen, 2016 TCC 62 (Informal Procedure)

Bocock J found that when a bank seized the security (a GIC) provided by a tax debtor to secure his guarantee of a bank loan to his son’s...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) transfer from guarantor by virtue of seizure of security by tax debtor’s bank 308

Blank v. Commissioner of Taxation, [2015] FCAFC 154, aff'd [2016] HCA 42

In 1994, a non-resident executive was granted units which entitled him, on retirement, to receive payments calculated by reference to the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) phantom profit participation unit amounts not income until paid by employer rather than when due 700
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(i) no apportionment possible between resident and non-resident services 270

Great-West Life Assurance Company v. The Queen, 2015 TCC 225

The appellant ("Great-West") provided prescription drug plans to the employees of various employers. The claims were processed by a third party...

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Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Regulations - Financial Services (GST/HST) Regulations - Subsection 4(2) electronic drug plan adjudication and processing was "quintessentially administrative in nature" 279
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (f.1) essential character of drug claim processing service was providing payment to the claimant 306
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.4) services described in (r.4) did not represent the essential character of drug claim processing service 269
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.5) essential character of drug claim processing service was providing payment to the claimant 186

Dimane Enterprises Ltd. v. The Queen, 2015 DTC 1013 [at 64], 2014 TCC 334

Purported distributions out of a purported EPSP to children employees of the taxpayer were to a bank account controlled by the father, so that the...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Sham purported recipients of trust distributions had no control over funds 242
Tax Topics - Income Tax Act - Section 144 - Subsection 144(1) - Employee Profit Sharing Plan purported recipients of trust distributions had no control over funds 242

Transalta Corporation v. The Queen, 2012 DTC 1106 [at 3044], 2012 TCC 86

Margeson J. accepted (at para. 99) that employees to whom the taxpayer issued shares in payment of bonuses to them gave consideration equal to the...

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McKenzie v. The Queen, 2011 DTC 1216 [at 1274], 2011 TCC 289

In settlement of a suit by the taxpayer, who was an income beneficiary, the settlement agreement provided for the payment by the trust to her of...

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Newmont Canada Corporation v. The Queen, 2011 DTC 1117 [at 628], 2011 TCC 148, aff'd 2012 DTC 5138 [at 7292], 2012 FCA 214 supra

The taxpayer acquired a 100% undivided interest in a property (the "Quarter Claim") adjoining its "Golden Giant" mine subject to a 50% net profits...

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Words and Phrases
reimbursement

Sochatsky v. The Queen, 2011 DTC 1065 [at 346], 2011 TCC 41, 2012 TCC 65

The individual taxpayer was found to have received a bonus from a closely-held corporation in the year that the corporation declared the bonus...

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Johnson v. The Queen, 2010 DTC 1213 [at 3568], 2010 TCC 321 (Informal Procedure)

Frequent flyer points applied by the taxpayer to purchase air tickets to Chicago for medical treatment there constituted "an amount paid" for...

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Innovative Installation Inc. v. The Queen, 2009 DTC 1388 [at 2135], 2009 TCC 580, aff'd supra

After noting (at para. 21) that "the case law is clear that an amount may be included in income even where it is only notionally or constructively...

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O'Dea v. The Queen, 2009 DTC 912, 2009 TCC 295

Promissory notes owing by the taxpayers, which were consideration for their acquisition of units of a limited partnership, provided that the...

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Collins & Aikman Products Co. v. The Queen, 2009 DTC 1179 [at 958], 2009 TCC 299, aff'd 2010 DTC 5164 [at 7293], 2010 FCA 251

A Canadian corporation ("C&A") paid two dividends to its Canadian-resident parent ("Holdings"), which distributed the same amounts to its...

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WPH Mechanical Services Ltd. v. The Queen, 2007 DTC 263, 2006 TCC 677

t was found that bonuses declared payable by the taxpayer to its two directors were paid by it within the 180 day period referred to in s. 78(4)...

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Aprile v. The Queen, 2005 DTC 585, 2005 TCC 216 (Informal Procedure)

Bell J. rejected the Crown's submission that the taxpayer can only make a deduction under s. 8(1)(i) for amounts paid in cash or by cheque with...

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Hill v. The Queen, 2002 DTC 1749 (TCC)

Miller T.C.J. noted that with respect to the situation where the taxpayer, which owed approximately $60 million in accrued interest, paid $60...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) 213
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) no Crown explanation of different treatment of simple interest 241

MacNiven v. Westmoreland Investments Ltd., [2001] 1 All ER 865 (HL)

In order to generate an interest deduction for accrued interest owing by an insolvent company ("WIL") to its shareholder (a pension fund) pursuant...

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Fleishman v. The Queen, 98 DTC 1836 (TCC) (Informal Procedure)

'The taxpayer received two cash payments of $10,000 and $25,000 on an interest-bearing promissory note for $525,000 owing by an arm's length...

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Gibson v. The Queen, 95 DTC 749 (TCC)

The taxpayer transferred his equity in a house to his former spouse in satisfaction of arrears of alimony or maintenance owing to her of $19,946....

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Phillips v. The Queen, 95 DTC 194 (TCC)

In finding that the redesignation of a 'bonus payable' to 'due to shareholder' did not constitute the receipt of an amount giving rise to income...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) 97

Blais v. MNR, 92 DTC 1497 (TCC)

A taxpayer was ordered in 1984 to retain arrears of alimentary allowance that had accumulated from March 1983 onward to be applied against an...

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Ed Sinclair Construction & Supplies Ltd. v. MNR, 92 DTC 1163 (TCC)

Bowman J. stated:

A mere bookkeeping entry in a loan account by itself does not constitute a taxable event unless there is something more, such as...

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Re Charge Card Services Ltd., [1988] 3 All E.R. 702 (C.A.)

A company issued charge cards to cardholders who would obtain petrol from garages by presenting the card and signing a sales voucher completed by...

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Associated Insulation Products, Ltd. v. Golder (1944), 26 TC 231, [1944] 2 All E.R. 203 (C.A.)

An American corporation passed a resolution providing "'that a distribution of seven per cent on the capital stock of this corporation, amounting...

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Cross v. London Provincial Trust Ltd., [1938] 1 All E.R. 428 (C.A.)

The taxpayer, who held bonds in which the payment of interest had been suspended, exchanged his matured interest coupons on the bond for...

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Gresham Life Society Co., Ltd. v. Bishop (1902), 4 TC 464 (HL)

The taxpayer, a UK life insurance company which was managed in London and had foreign branch businesses, was assessed for interest and dividends...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) no constructive receipt 204

Administrative Policy

17 June 2014 External T.I. 2013-0506731E5 - Immigration

An individual shareholder immigrates to Canada, thereby becoming a Canadian resident. NRCo issues a $1,000 promissory note to her in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) dividend receivable acquired on immigration 141
Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) dividend not recognized until paid 180

24 November 2013 CTF Roundtable, 2013-0508151C6 - Upstream Loans

A loan or indebtedness will be considered to have been repaid by a debtor by way of set-off against a receivable of the debtor "if the set-off...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 90 - Subsection 90(8) - Paragraph 90(8)(a) repayment by set-off 75

30 January 2014 External T.I. 2013-0515761E5 F - Dividend received

A dividend of a taxable Canadian corporation owned by an individual is not paid in money but is recorded in its books as an increase in a loan...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) book entry dividend 141

11 December 2013 External T.I. 2013-0474161E5 - T-slips and dividend and interest

Respecting a question as to when dividends are paid and received for T5 purposes, CRA stated:

In Innovative Installation Inc. v The Queen, 2009...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) constructive receipt 98

6 November 2012 External T.I. 2012-0452531E5 - Satisfactory Evidence of Payment

In response to a question as to whether "a demand note payable, which is accepted as absolute payment of salary owing to an employee, constitutes...

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13 June 2012 External T.I. 2012-0435351E5 F

Cheques issued by Opco but not yet cashed would not reduce its cash on hand given that under the applicable law (the Quebec Civil Code), the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation cheques not yet cashed 48

17 February 2004 External T.I. 2003-0033915

In indicating that a cash pooling arrangement entered into by a Canadian subsidiary with its non-resident parent corporation could result in an...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 15 - Subsection 15(2.6) cash pooling with NR parent 77

IT-243R4, para 5

"A corporation is not considered to have paid a dividend when it merely credits a shareholder's account, unless the shareholder is able to...

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5 July 1990 TI AC59710

Where a promissory note is given in consideration for services, the acceptance of the note would be considered to be an amount received under s....

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5 January 1996 Memorandum 952397 (C.T.O. "Gross-Up Payments")

A gross-up on a debt obligation owing to a Canadian lender will be included in the Canadian lender's income under s. 9 or s. 12(1)(c) even "where...

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30 June 1995 Memorandum 950390 (C.T.O. "Tax Status of Cheque Returned by Cash Method Farmer?")

A payment by cheque is equivalent to a payment in cash as long as no special circumstances lead to another conclusion, and the cheque is not...

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19 June 1995 Memorandum 950842 (C.T.O. "Patronage Dividends Paid by Non Co-ops")

Payment of a patronage dividend may be effected by the issuance of shares or debt instruments, where such an arrangement is authorized by the...

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May 1995 Tax Executive Institute Round Table, Q. 22 (C.T.O. "Part I.3, O/S Cheques & Overdrafts")

Bank overdrafts are considered to have arisen to the extent that they have been utilized or drawn upon. For these purposes, RC, in common law...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 181.2 - Subsection 181.2(3) 101

6 July 1994 Memorandum 932382 (C.T.O. "Bonds Issued in lieu of Interest")

Bonds issued to a Canadian bank in settlement of arrears interest on a non-performing loan of a Brazilian debtor would not be considered to...

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1993 A.P.F.F. Round Table, Q.15

There is no repayment for the purposes of s. 20(1)(hh) when shares are converted to a debt security and the parties are in essentially the same...

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26 November 1992 T.I. 923506 (September 1993 Access Letter, p. 411, ¶C20-1161)

For farmers on the cash method, a post-dated cheque that is received on a date that a debt owing to the taxpayer is not yet payable will be...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 28 - Subsection 28(1) 59

31 August 1992 T.I. (Tax Window, No. 24, p. 8, ¶2184)

A direct payment by a non-resident to Revenue Canada of a tax liability of a related Canadian corporation would entail the receipt of an amount by...

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7 August 1992 T.I. 921752 (May 1993 Access Letter, p. 198, ¶C76-066)

Because the function of a journal entry is to record a transaction rather than to make it legally effective, the reclassification of a...

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28 July 1992 Memorandum 921859 (April 1993 Access Letter, p. 151, ¶C180-136)

A taxpayer is not considered to have "paid" interest on a loan owing by him to a charitable foundation by virtue only of journal entries being...

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15 June 1992 T.I. 921368 (December 1992 Access Letter, p. 18, ¶C56-208)

No payment will be considered to occur pursuant to an agreement between the parties to the effect that interest on a promissory note will be...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 74.5 - Subsection 74.5(1) 38

3 July 1991 Memorandum (Tax Window, No. 5, p. 22, ¶1335)

A journal entry recording a transfer of an amount from a salary payable account to a loan from shareholder account does not by itself constitute...

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85 C.R. - Q.29

Constructive receipt by an employee benefit plan beneficiary occurs when an amount is made available to him without being subject to any...

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84 C.R. - Q.13

Under an unfunded deferred compensation plan, constructive receipt is considered to occur in situations where an amount is credited to an...

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IT-436R "Reserves - Where Promissory Notes are Included in Disposal Proceeds"

Where a promissory note has been accepted as absolute payment for the disposition of a property, no amount is due in respect of the disposition,...

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IT-168R2, para. 3-4

deferred remuneration should be included in income for the year in which the employee is entitled to receive it or actually receives it.

IT-305R3 "Establishment of Testamentary Spouse Trust"

In interpreting the requirement that the spouse must be entitled to receive all the income of a spouse trust that arises before the spouse's...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 70 - Subsection 70(6) 0

IT-196R2 "Payments by Employer to Employee"

A taxable payment is included in computing the employee's income on the earliest taxation year in which he receives it, absolute enjoyment or use...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) 0

Articles

Kevin Bianchini, Reuben Abitbol, "Taxation of Stock Appreciation Rights", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24 No. 8, 2015, p.1655

Safe harbour until SAR vesting (p. 1656)

[T]he CRA has taken the position that until the employee has a right to exercise and cash in the SARs,...

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E.G. McKendrick, Chitty on Contracts, Vol. 1, Thirtieth Edition (2008).

Discharge by paying creditor's debt (§21-042, p. 1426)

If the creditor requests the debtor to pay the debt to a third party, such a payment is...

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C.R.B. Dunlop, Creditor-Debtor Law in Canada, Second Edition (1994).

Discharge by paying creditor's debt (pp. 20-1)

As a general rule, a debtor can discharge a debt only by payment to the creditor personally, ...

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Arnold, "Timing and Income Taxation: The Principles of Income Measurement for Tax Purposes", Canadian Tax Paper, No. 71, Canadian Tax Foundation, July 1983

See chapter 3 entitled "Cash Basis Accounting: The Concepts of Receipt and Payment".

Wilson, "Repayment of Shareholder Loans", 1995 Canadian Tax Journal, Vol. 43, No. 3, p. 746.

Includes (at pp. 751-754) a discussion of the Clayton rule.