Paragraph 12(1)(e) - Reserves for certain goods and services, etc.
Cases
Argus Holdings Ltd. v. Canada, 2000 DTC 6681 (FCA)
For accounting purposes the taxpayer, which operated a racquetball club, had brought initiation fees into income over a ten-year period on a...
Sears Canada Inc. v. The Queen, 89 DTC 5039 (FCA)
The amount of a s. 20(1)(m) reserve which RC had allowed as a deduction in computing the taxpayer's income in 1975 (a year not subject to appeal)...
Dominion of Canada General Insurance Co. v. The Queen, 86 DTC 6154, [1986] 1 CTC 423 (FCA)
The words of s. 12(1)(e) "are directed toward the inclusion in income of an 'amount' that was 'deducted' in the previous year and not toward an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) | 104 |
Abed Estate v. The Queen, 82 DTC 6099, [1982] CTC 115 (FCA)
The non-resident taxpayer did not file any income tax returns on the ground, later established in court to be unfounded, that he was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(7) | 129 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) | taxpayer did not object to Minister deducting reserve | 157 |
| Tax Topics - Treaties - Article 7 | 98 |
See Also
Dubawn Holdings Inc. v. The Queen, 94 DTC 1252 (TCC)
A reserve which the taxpayer had erroneously deducted from income in his 1984 taxation year (which now was statute-barred) was required to be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(7) - Paragraph 20(7)(a) | 69 |
Administrative Policy
24 March 1995 T.I. 950729 (C.T.O. "Sale Price of Shares - Closing")
Discussion whether an increase in the sale price of shares between the date of an agreement of sale and the closing date represents interest or an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition | 34 |
Paragraph 12(1)(f) - Insurance proceeds expended
Administrative Policy
4 March 2015 External T.I. 2014-0550761E5 F - 44(1) et disposition partielle
A portion of a building was destroyed by fire, with a portion of the insurance proceeds used to reconstruct it. CRA stated (TaxInterpretations...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Former Business Property | part of building treated as former business property | 165 |
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) | partial destruction of building | 197 |
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (f) | partial destruction of building | 76 |
Paragraph 12(1)(g) - Payments based on production or use
Cases
Canada v. Larsen, 99 DTC 5757 (FCA)
The taxpayer and his three siblings gave a lumber company the right to enter their land to remove timber during a five-month period for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 1106 - Subsection 1106(1) | 95 |
The Queen v. Mel-Bar Ranches, 89 DTC 5189 (FCTD)
A timber-sale agreement between the taxpayer (a farmer) and the purchaser provided for the purchase of 25,500 tonnes "more or less" of fir at a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | 48 |
Consumers' Gas Company Ltd. v. The Queen, 82 DTC 6300, [1982] CTC 339 (FCTD), aff'd, 84 DTC 6058, [1984] CTC 83 (FCA)
Where the taxpayer was compensated for changing the location of its pipelines it was found that the amounts received were not "dependent upon the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Disposition of Property | 36 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | ost not reduced by reimbursement right therefor | 126 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | 35 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 30 |
Porta-Test Systems Ltd. v. The Queen, 80 DTC 6046, [1980] CTC 71, 80 DTC 6046 (FCTD)
A royalty to be received by the taxpayer was calculated as the greater of 5% of the licensee's net sales for the following three years and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Patents and Know-How | 154 |
Lackie v. The Queen, 79 DTC 5309, [1979] CTC 389 (FCA)
Payments received by the owner of a gravel pit, equal to $.20 per ton of gravel removed by the licensee, were amounts that were dependent on the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 74.1 - Subsection 74.1(1) | 58 |
MNR v. Gault, 65 DTC 5157, [1965] CTC 261, 65 DTC 5157 (Ex Ct)
An arrangement under which a taxpayer, which had purchased the goodwill of an insurance business of the vendor thereof, including client lists,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | 101 |
Gingras v. MNR, 63 DTC 1142 (Ex Ct)
S.6(1)(j) of the pre-1972 Act was found to be applicable to the sale by the taxpayer to a corporation controlled by him of copyright for a fixed...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Reciprocity | 98 |
Minister of National Revenue v. Wain-Town, 52 DTC 1138, [1952] CTC 147, [1952] 2 S.C.R. 377
The taxpayer, which assigned its franchise to supply municipalities with natural gas to another company in consideration for amounts (described in...
See Also
Fiducie Claude Deragon v. The Queen, 2015 CCI 294
Vendors agreed to sell shares for a sale price of $16 million, of which $2 million was payable in subsequent years only if an EBITDA condition...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) | sales proceeds reduced by subsequent price adjustment clause but included conditional sales proceeds | 463 |
| Tax Topics - General Concepts - Effective Date | proceeds reduced by subsequent settlement pursuant to price adjustment clause | 195 |
Smith v. The Queen, 2011 DTC 1332 [at 1870], 2011 TCC 461
The taxpayer sold the client list respecting his insurance brokerage business for a stipulated dollar sale price (payable in five annual...
Wright v. The Queen, 2003 DTC 763 (TCC)
The taxpayers and their father had used 430 acres of a 5,700 acre property in Manitoba for farming for many years before farming ceased in the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | 118 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | sale of timber from former farm on capital account | 118 |
Rouleau v. MNR, 91 DTC 120 (TCC)
On the sale of the taxpayer's chartered accountancy practice, it was agreed that the sale price for the goodwill would be 20% of gross fees earned...
Pacific Pine Co., Ltd. v. MNR, 61 DTC 95 (TAB)
S.6(1)(j) of the pre-1972 Act did not apply where the taxpayer sold a timber licence for a purchase price payable in 16 quarterly instalments...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Leases and Licences | 102 |
Mr. R. v. MNR, 50 DTC 398 (ITAB)
An agreement for the assignment by the taxpayer to a drug company of the taxpayer's rights under patent to a medicinal preparation in...
Administrative Policy
12 January 2015 External T.I. 2014-0555071E5 - POD subject to earn-out
In an arm's length sale, the corporate "Vendor" disposes of the "Property" (including land options agreements, permits, engineering data and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | proceeds of goodwill on sale of wind turbine development project | 231 |
| Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - cumulative Canadian exploration expense - Element G | proceeds of wind turbine development project | 147 |
| Tax Topics - Income Tax Regulations - Regulation 1219 - Subsection 1219(1) | wind turbine development project | 108 |
27 August 2014 External T.I. 2014-0529221E5 F - Changement de méthode pour déclarer un gain
Could a taxpayer, who did not use the cost recovery method to report the capital gain on the disposition of shares subject to an earnout agreement...
24 February 2014 External T.I. 2013-0505391E5 F - Clause de earnout renversé
CRA confirmed its position in 2000-0051115 that:
Where the cost recovery method is not used and the sale price of a property is not certain at the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) | no capital gains reserve on reverse earn-out for a share sale | 217 |
14 May 2013 External T.I. 2013-0480561E5 F - Méthode de recouvrement du coût
Mr. A holds all the shares of a Canadian-controlled private corporation (Aco), which has a calendar fiscal period and whose only asset is shares...
20 December 2011 External T.I. 2011-0423771E5 - Payments Based on Production or Use
The position in IT-462, para. 5(c) (respecting the sale of property for a fixed sum plus additional amounts based on production exceeding a...
11 May 2001 Internal T.I. 2001-007236
Respecting a submission that accrued royalties were not required to be included in the taxpayer's income because they were not received in the...
24 September 1997 T.I. 971836
S.12(1)(g) can apply to the disposition of a partnership interest.
20 January 1994 Memorandum 932972
Re application of s. 12(1)(g) to woodlot operation.
30 December 1992 T.I. (Tax Window No. 27, p. 5, ¶2321)
S.12(1)(g) does not apply where the consideration received for the sale of software includes a note the timing of payment of which depends on the...
2 September 1992 Memorandum (Tax Window, No. 24, p. 17, ¶2222)
The sale of cutting rights for a fixed price for a fixed quantity of timber to be taken within a fixed period of time will not be subject to s....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | 53 |
IT-462 "Payments Based on Production or Use" 1 January 1995 (Archived)
5. When paragraph 12(1)(g) requires proceeds of dispositions of property to be included wholly or partly as income, subject to 3 above, the...
IT-426R "Shares Sold Subject to an Earnout Agreement" 26 Ocober 2004 (Archived)
2. Taxpayers may use the cost recovery method if the following conditions are met:
- (a) The vendor and purchaser are dealing with each other at...
Articles
Scheuermann, "Income and Commodity Tax Aspects of Acquiring and Exploiting Technology", 1991 Conference Report, c. 45.
Richardson, "Purchase and Sale of a Business: Income Tax Aspects of Warranties, Price Adjustments and Earn-Outs", 1990 Corporate Management Tax Conference Report, pp. 10:11-10:23.
Paragraph 12(1)(i) - Bad debts recovered
See Also
Beck v. MNR, 92 DTC 1784 (TCC)
The taxpayer, which in 1983 had written off a debt owing to it by a corporation ("Brenloc"), in 1984 participated in transactions pursuant to...
Paragraph 12(1)(j) - Dividends from resident corporations
Cases
Banner Pharmacaps NRO Ltd. v. Canada, 2003 FCA 367, 2003 DTC 5642 (FCA)
The wholly-owned Canadian subsidiary of the taxpayer declared a dividend on its shares, with the resolution stipulating that the dividend was to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Payment & Receipt | promissory note accepted as payment | 139 |
| 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 |
Paragraph 12(1)(l.1) - Partnership — interest deduction add back
Administrative Policy
28 July 2015 External T.I. 2015-0567811E5 - Thin cap rules for members of a partnership
Canco (wholly-owned by NRco) and its wholly-owned subsidiary (Canco Sub) hold respective 99.9% and 0.1% interests in the "Partnership," which does...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(7) | sale by Cancos of their partnership interests part-way through year did not eliminate their proportionate pick-up of partnership debt | 156 |
Articles
Shane Onufrechuk, Warren Pashkowick, "Tax Considerations of Major Construction Projects", 2014 Conference Report, Canadian Tax Foundation, 10:1-35.
Proxy income inclusion does not boost unit ACB (p. 10:13)
[I]f a corporate partner exceeds the permitted 1.5:1 ratio, interest expense on...
Paragraph 12(1)(n.3) - Retirement compensation arrangement
Administrative Policy
17 December 2010 External T.I. 2009-0338841E5 - Characterization of Income from an RCA
Are amounts received by an employer on the winding-up of an RCA (where its contributions were deducted in computing its business income) included...
31 March 1995 External T.I. 5-950295
"Any amount received by the employer from a custodian as a refund of refundable taxes is included in the employer's income under paragraph...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(2) | 51 |
Paragraph 12(1)(o)
Cases
Midwest Oil Production Ltd. v. The Queen, 82 DTC 6092, [1982] CTC 107 (FCTD), aff'd 83 DTC 5304, [1983] CTC 338 (FCA)
Because the word "receivable" relates to a change in custody or possession, not to a change in ownership, a royalty obligation to deliver crude...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 169 | 55 | |
| Tax Topics - Income Tax Act - Section 172 - Subsection 172(2) | 55 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Amount | 15 |
Paragraph 12(1)(r) - Inventory adjustment
Administrative Policy
93 CPTJ - Q.5
The word "obsolescence" in s. 12(1)(r) is considered to refer to an amount respecting obsolescence of fixed assets where such amount is included...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 29 |
Paragraph 12(1)(t) - Investment tax credit
Administrative Policy
15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)
The federal apprenticeship job creation tax credit ("AJCTC") is generally included in income under s. 12(1)(t). CRA noted:
Paragraph 12(1)(t)...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) | timing of receipt of apprenticeship training tax credit | 75 |
Paragraph 12(1)(x) - Inducement, reimbursement, etc.
Cases
Imperial Oil Resources Limited v. Canada (Attorney General), 2008 DTC 6657, 2008 FC 1037
The Alberta government gave the taxpayer a reduction in the royalties it would otherwise have to pay to Alberta on condition that the taxpayer...
Iron Ore Co. of Canada v. The Queen, 2001 DTC 5411, 2001 FCA 224
The taxpayer made an unsuccessful submission that a refund of Quebec sales tax was not a "refund" described in s. 12(1)(x(iv) because the word...
Canada v. Canada Safeway Limited, 98 DTC 6060 (FCA)
In finding that a refund of federal sales tax that predecessors of the taxpayer previously had paid in error did not qualify as a reimbursement...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Timing | 35 |
The Queen v. CCLC Technologies Inc., 96 DTC 6527 (FCA)
eAn agreement the taxpayer entered into with the province of Alberta concerning a coal and heavy oil project was found to have resulted in the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | 128 |
Westcoast Energy Inc. v. Her Majesty The Queen, 91 DTC 5334, [1991] 1 CTC 471 (FCTD), briefly aff'd 92 DTC 6253 (FCA)
Damages which the taxpayer received in settlement of its suit based on the direct and indirect costs incurred by it in replacing a defective pipe...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 84 |
See Also
GMAC Leaseco Corporation v. The Queen, 2015 DTC 1141 [at 908], 2015 TCC 146
General Motors of Canada Limited ("GMC") made "residual value support payments" to the taxpayer ("GMAC"), which purchased vehicles subject to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.4) | amounts replaced reduced lease income rather than contributing to leased vehicles' cost | 239 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | capital tax accrued from day to day | 226 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | payments received in consideration for reducing lease payments were compensation for lost lease income, and s. 9 income | 284 |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | surcharges received by lessor at lease termination for excess use were income | 264 |
| Tax Topics - Income Tax Act - Section 9 - Timing | inducement payments received by lessor from manufacturer not income until potential repayment obligation quantified | 221 |
Henco Industries Limited v. The Queen, 2014 DTC 1161 [at 3528], 2014 TCC 192
A subdivision property of the taxpayer, a developer, was blockaded by Six Nations protesters. To diffuse the conflict, the Ontario government...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | parol evidence rule not applying to surrounding evidence/press releases admitted | 239 |
| Tax Topics - General Concepts - Fair Market Value - Land | deference to taxpayer's figure within appraiser's range of values | 111 |
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | payment to withdraw from business was not an eligible capital amount | 146 |
| Tax Topics - Income Tax Act - Section 23 - Subsection 23(1) | land ceased to be inventory through sterilization rather than business cessation | 184 |
| Tax Topics - Income Tax Act - Section 3 | compensation payment for destroyed business was non-taxable | 171 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation payment for destroyed business was non-taxable | 171 |
Immunovaccine Technologies Inc. v. Canada, 2014 DTC 5119 [at 7309], 2014 FCA 196, aff'g 2013 DTC 1101 [at 531], 2013 TCC 103
Under a federal program for fostering Maritimes development, the taxpayer received interest-free advances, which were not characterized as...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | "government assistance" generally encompasses amounts advanced on non-commercial terms | 261 |
| Tax Topics - Statutory Interpretation - Ejusdem Generis | definition ending in "any other form of assistance" precluded a narrow reading | 82 |
Morguard Corporation v. The Queen, 2012 DTC 1099 [at 2959], 2012 TCC 55, 2011 TCC 116, aff'd 2013 DTC 5009 [at 5554], 2012 FCA 306
After finding that break fees totalling $7.7 million received by the taxpayer in an unsuccessful acquisition attempt were fully taxable to it...
Alberta Power (2000) Ltd. v. The Queen, 2009 DTC 1514, 2009 TCC 412
On the early termination of a power purchase agreement between the taxpayer and the Alberta government, the taxpayer received $59.7 million from...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | 56 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Paragraph 13(21)(e) | 56 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 111 |
PSC Elstow Research Farm Inc v. The Queen, 2009 DTC 168, 2008 TCC 694
Research grants received by the parent of the taxpayer were not includible in its income under s. 12(1)(x) to the extent that such assistance was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(19) | 53 | |
| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(c) | 113 |
Hudson Bay Mining and Smelting Co., Ltd. v. The Queen, 2003 DTC 173 (TCC)
Tax credits received by the taxpayer from the Manitoba government were in respect of Canadian exploration expenses that it incurred as agent for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Specific v. General Provisions | 66 |
Coughlan v. The Queen, 2001 DTC 719 (TCC)
Damages received by the taxpayer from a corporation of which he formerly was an officer and shareholder for conspiring to injure his reputation,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 137 |
Bois Aisé de Roberval Inc. v. The Queen, 99 DTC 380 (TCC)
A refund of export taxes previously paid by the taxpayer was deemed to be income under the revised version of s. 12(1)(x)(iv), which had been...
Quincaillerie Laberge Inc. v. The Queen, 95 DTC 155 (TCC)
After finding that $575,000 received by the taxpayer for agreeing to extend the term of a loan for $10,500,000, rather than exercising its rights...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | amendment of agreement did not entail its transfer | 140 |
Hill v. The Queen, 94 DTC 1078 (TCC), aff'd 95 DTC 5225 (FCA)
A law firm of which the taxpayer was a member was required to use a portion of the amount paid or to be paid to it as an inducement to sign a new...
Tyoxide Canada Inc. v. The Queen, 93 DTC 1499 (TCC)
A Quebec tax credit, calculated as 10% of the wages of Quebec employees engaged in research activities, was included in income of the taxpayer for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(11.1) - Paragraph 127(11.1)(c) | 34 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Amount | 17 |
Everett's Truck Stop Ltd. v. The Queen, 93 DTC 965 (TCC)
The assumption by another corporation ("Polar Oils") of the obligation of the taxpayer to pay $119,658 in consideration for the taxpayer's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 244 - Subsection 244(14) | 92 |
St. John Dry Dock & Shipbuilding Co. v. MNR (1944), 2 DTC 663 (Ex Ct)
Before concluding that a subsidy received by the taxpayer from the federal government, pursuant to a statute, for the construction of a dry dock...
Higgs v. Olivier (1952), 33 TC 136 (C.A.)
Before going on to find that a lump sum received by an actor in consideration for his covenant not to exercise his vocation for a period of 18...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | 127 | |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 127 |
Administrative Policy
26 May 2016 IFA Roundtable Q. 6, 2016-0642081C6 - German Organschafts
Under an “Organschaft,” a German parent (“Parentco”) and its German subsidiary (“Subco”) can enter into an agreement under which Subco...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) | profit transfer payments by German sub to its German parent deemed to be dividends under s. 90(2) | 319 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(B) | profit transfer payments made by a German sub to German parent are s. 90(2) dividends not within s. 95(2)(a)(ii)(B) afterr 2016 | 153 |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) | German profit transfer payment to loss subsidiary is contribution of capital | 158 |
16 February 2016 External T.I. 2015-0618601E5 - Earned or Unearned Revenue
The taxpayer received a lump-sum payment (the “Payment”) from a major supplier (“ACo”) in consideration for entering into a supplier...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(2) | no deferral of lump sum received on signing 15-year supplier loyalty agreement | 182 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) | no deferral for amount included under s. 56.4(2) or 12(1)(x) | 126 |
12 September 2012 Annual CTF Roundtable, 2012-0453381C6 - 2012 CICA Conference
An insolvent (but not bankrupt) company negotiates a settlement with CRA of unremitted GST for less than the balance owing. CRA stated that "this...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount | tax debt not a commercial debt obligation | 113 |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | forgiveness of source deductions on income account | 108 |
15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)
The Ontario apprenticeship training tax credit ("ATTC") is generally included in income under s. 12(1)(x). After noting that a tax credit is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(t) | federal apprenticeship job creation tax credit | 91 |
15 September 2014 Internal T.I. 2014-0545001I7 - Grants paid to employers of reservists
Amounts that are received from the Compensation for Employers of Reservists Program by employers of reservists and by self-employed individuals...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | compensation for reservist costs | 40 |
20 May 2014 External T.I. 2013-0516121E5 F - Debt forgiveness
A compromise by Aco under Division I of Part III of the Bankruptcy and Insolvency Act resulted in reassessments owing by Aco for unremitted GST...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | BIA settlement of GST interest | 127 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(26) | BIA settlement of unremitted GST interest | 89 |
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Commercial Debt Obligation | BIA settlement of unremitted GST interest | 127 |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | BIA settlement on capital account | 82 |
12 July 2011 Internal T.I. 2010-0366321I7 - Tax treatment of break fees received
In indicating that a break fee should be included in income under s. 12(1)(x) even if it were not includable under s. 9(1), , CRA indicated that...
21 March 2011 External T.I. 2011-0395011E5 - Deductibility of Ontario SAT
A particular Ontario tax on life insurance corporations ("SAT") is determined as a fixed percentage of the amount by which the corporation's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 156 |
2008 Ruling 2006-0217541R3 - Stock Option Reimbursement
A Canadian public company ("Parentco") and non-resident subsidiaries ("Subco1 and Subco2", collectively "Subco") enter into a "Recharge...
2004 Ruling 2004-007680
//www.bci.ca/">www.bci.ca): Non-capital losses of BCI are transferred to its affiliate, Bell Canada, pursuant to transactions under which a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 152 |
26 July 2001 External T.I. 2001-008329
A Quebec sales tax input tax refund is included in income under s. 12(1)(x) when received.
25 May 2001 Internal T.I. 2001-008500
The receipt in Westcoast Energy Inc. v. The Queen, 91 DTC 5334 (FCTD), affirmed 92 DTC 6253 (FCA) would not be considered to be a "refund,...
2001 Ruling 2000-003987
Cash receipts of a partnership for assuming contingent liabilities (respecting unfunded supplemental pension and other retirement benefit...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | 123 |
18 September 2000 External T.I. 2000-002946
Where a Canadian parent is reimbursed by its foreign subsidiary for the difference between the exercise price and the fair market value of shares...
15 November 1999 External T.I. 5-992458
A corporation that has received prepaid rent with respect to a building leased by it to another Canadian corporation then transfers the building...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) | prepaid rent | 33 |
7 July 1999 T.I. 982411 [ITC received when deducted]
A provincial investment tax credit is considered to be "received" by the taxpayer at the time it is deducted. Similarly, an investment tax credit...
5 February 1998 T.I. 972953 [loan repayable out of revenues]
Respecting a loan that is repayable out of projected revenues, the Directorate stated that "a loan would be a forgivable loan to the extent that...
1997 Ruling 970769 [benefit on redemption not an inducement]
The redemption of shares for a nominal amount pursuant to their terms would not constitute an inducement for purposes of s. 12(1)(x) as any...
29 October 1996 External T.I. 5-962632
S.12(1)(x) could apply to the receipt by a corporation of a premium for granting an option to require it to issue bonds, depending on the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 95 |
11 January 1996 T.I. 952684 (C.T.O. "Alberta Government Assistance - Small Business Equity")
A grant made pursuant to the initial Small Business Equity Corporations Act (Alberta) to a taxpayer for the purchase of venture capital...
1 February 1994 T.I. 933226 [investor rebate inclusion under s. 12(2.1)]
Where the manager of a mutual fund trust rebates a portion of the management fee earned by it directly to investors who have invested substantial...
1994 A.P.F.F. Round Table, Q. 41
"There may be constructive receipt by a taxpayer when an amount is entered as a credit to his account or, as in Everett's Truck Stop Ltd., that is...
94 CPTJ - Q. 1
The Alberta royalty tax credit is not included in a taxpayer's income under s. 12(1)(x).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - 1 | 50 | |
| Tax Topics - Excise Tax Act - Section 153 - Subsection 153(3) | 9 | |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) | 33 |
2 December 1993 T.I. 932103 (C.T.O. "Taxation of GST and other Rebates")
The Ontario Farm Tax Rebate (entailing a rebate of 75% of property taxes paid on eligible farm land and out-buildings by eligible owners) is...
5 November 1993 T.I. 932008
Respecting guarantees by the Province of Saskatchewan of loans made to farmers where the Province did not waive its subrogation rights, the...
27 October 1993 T.I. 931992 [inclusion re forgivable loan at time of advance]
A loan from the Agricultural Credit Corporation of Saskatchewan generally would be regarded as a forgivable loan and, therefore, as assistance "to...
26 February 1993 T.I. (Tax Window, No. 29, p.17, ¶2440)
A reimbursement or other assistance received in respect of eligible capital property cannot be applied to offset the cost amount of that property...
10 February 1993 T.I. 921720C (See also 13 January 1993 T.I. 923304)
Amounts paid to Atlantic hog farmers were repayable, except that "if certain conditions subsequent are met they may be forgiven". The Directorate...
8 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2437)
Credits under the Quebec Mining and Duties Act do not fall within the ambit of s. 12(1)(x).
December 1992 B.C. Tax Executives Institute Round Table, Q.13 (October 1993 Access Letter, p. 481)
It is a question of fact whether a lease cancellation payment received by a tenant would be excluded from the application of s. 12.1(x) by s....
"Farm Support Payments: A Paper by the Rulings Directorate addressed to Agriculture Canada - 1992" (September 1993 Access Letter, p. 426).
7 November 1992 Memorandum (Tax Window, No. 27, P. 21, ¶2354, October 1993 Access Letter, p. 478)
Ontario's super allowance for scientific research and current cost adjustment is not considered to be government assistance, incentives or tax...
12 October 1992 T.I. 922359 (September 1993 Access Letter, p. 406, ¶C9-283)
Where an amount is included in income under s. 9, s. 12(1)(x) will not apply and, therefore, the election under s. 13(7.4) will not be available.
31 August 1992 External T.I. 5-921279
Payments made by a non-resident corporation to a related corporation to indemnify it for potential penalties and interest relating to income and...
30 November 1991 Round Table (4M0462), Q. 8.2 - Subscription to Preferred Shares by a Government Body (C.T.O. September 1994)
Where an investment by a government body in shares that pay no dividends does not represent an ordinary business investment, RC generally is of...
30 November 1991 Round Table (4M0462), Q. 8.1 - Acquisition of a Business (C.T.O. September 1994)
"A payment as an inducement covered by subparagraph 12(1)(x)(i) to 12(1)(x)(iii) that is received as part of the acquisition of a business will be...
91 C.R. - Q.19
It is a question of fact whether a contribution of capital by a shareholder to a corporation to fund the acquisition of a capital asset can...
1 August 1991 T.I. (Tax Window, No. 7, p. 18, ¶1382)
The Nova Scotia research and development tax credit (which is a deduction in computing provincial income tax) is government assistance, whereas...
26 July 1991 T.I. (Tax Window, No. 7, p. 2, ¶1376)
No general conclusion has been reached as to whether s. 12(1)(x) may apply to include a premium in the income of the issuer of commercial paper.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 22 |
20 March 1991 T.I. (Tax Window, No. 1, p. 2, ¶1158)
FST inventory rebates received pursuant to s. 120 of the Excise Tax Act are considered to be assistance in respect of the cost of property or an...
17 January 1991 Internal T.I. 7-90326
The interest component of damages received by a limited partnership in respect of interest assessments of its partners as a result of the failure...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | 43 |
17 January 1991 Memorandum (Tax Window, No. 1, p. 4, ¶1150)
As a result of the amendments to s. 12(1)(x)(iv) effective 1 January 1990 all damages received after that date are included in s. 12(1)(x)(iv),...
14 December 1990 T.I. (Tax Window, Prelim. No. 2, p. 23, ¶1056)
Most grants received under the Ontario Fast Start Program will be taxable under s. 12(1)(x).
30 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 17, ¶1067)
A government loan under which the corporation must commence repayment on the earlier of 2004 and the time at which cumulative sales levels have...
4 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 6, ¶1023)
Where a tenant inducement payment is required to be included in income under s. 9 in accordance with GAAP, s. 12(1)(x) has no application, and no...
19 September 1990 Memorandum ACC 96248
"Where any possibility of forgiveness is inherent in the terms and conditions of a loan agreement, paragraph 12(1)(x) applies to the principal...
90 C.P.T.J. - Q.14
Even prior to the replacement in s. 12(1)(x)(iv) of "expense" by "outlay or expense", s. 12(1)(x)(iv) was not limited to reimbursements of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | 35 |
11 May 1990 Memorandum (October 1990 Access Letter, ¶1494)
The one-time transitional credit for small businesses provided under s. 346 of the Excise Tax Act will be taxable under s. 12(1)(x).
30 May 1990 T.I. (October 1990 Access Letter, ¶1459)
Where an amount of assistance falls within both ss.12(1)(x) and 37(1)(b), the latter will prevail.
5 February 1990 T.I. (July 1990 Access Letter, ¶1318)
Where a Canadian parent makes a contribution of capital to its wholly-owned subsidiary corporation to fund capital expenditures on SR&ED, the...
5 January 1990 T.I. (June 1990 Access Letter, ¶1252)
Instead of requiring the inclusion in income of payments which grape farmers received from the Department of Agriculture to remove grapes from...
3 January 1990 T.I. (June 1990 Access Letter, ¶1253)
Amounts of government assistance which decrease the cost of property pursuant to s. 53(2)(k) do not have to be included in the taxpayer's income...
89 C.M.TC - "Leasing Costs" - "Application of Paragraph 12(1)(x) of the Act to the Tenant"
s. 12(1)(x) is not generally applicable to interest-free loans provided that the loan is unconditionally repayable. "It is possible that GAAR...
88 C.R. - Q.16
Where a limited partner receives a cash flow grant from the developer if the cash flow received by him from the partnership is insufficient to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.2) - Paragraph 96(2.2)(d) | 37 |
88 C.R. - Q.46
Where an interest-free loan is provided to an investor in a real estate project which is forgivable to the extent that a guaranteed cash flow...
87 C.R. - Q.17
S.12(1)(x) will not have application solely by virtue of a loan provided as an inducement being made at lower than a commercial rate of interest,...
86 C.R. - Q.8
Minor adjustments to an agreement in writing entered into before May 23, 1985 should not cause an inducement received after May 22, 1985 to be...
86 C.R. - Q.9
A tax credit is "received" for purposes of s. 12(1)(x) when the tax instalments required to be made by the taxpayer are reduced, and otherwise at...
86 C.R. - Q.10
The B.C. venture capital tax credit is not included in income.
Articles
Lewin, "Tax Treatment of Lease Inducement and At-Risk Rules and the New Limited Recourse Debt Rules", 1995 Corporate Management Tax Conference Report, c. 5.
Carr, "Lease Inducement Payments", 1993 Conference Report, C. 32.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 0 |
Subparagraph 12(1)(x)(iv)
Administrative Policy
8 October 2004 Roundtable, 2004 APFF Roundtable, Q. 34, 2004-0087021C6 - Repayment of financing costs
Would s. 12(1)(x) apply in a situation where a corporation (the "Borrower") incurred financing expenses in connection with money that was...