Subsection 106(1) - Income interest in trust
Administrative Policy
S6-F2-C1 - Disposition of an Income Interest in a Trust
Cost to the beneficiary
1.20 For the purpose of determining the deduction available under subsection 106(1), the cost to a beneficiary of the...
Example 2
…Mr. X establishes a personal trust (the Trust) in favour of his son, Mr. A, and grandson, Mr. B. He settles the Trust by transferring to the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(b) | 93 | |
| Tax Topics - Income Tax Act - Section 67.6 | 239 |
Scenario 2
In a particular tax year, the Trust had income of $25,000 that it allocated to Mr. A. The Trust did not have enough funds to pay that amount in...
Scenario 3
Adopt the same additional facts as outlined in Scenario 2. Assume further that the Trust distributes $100,000 of income to Mr. B in the first tax...
Description
Year 1
Year 2
$100,000
$150,000
$50,000 ($150,000 - $100,000)
Therefore, at the end of Year 2, Mr. B would have fully offset the cost of acquisition of his income interest in the Trust.
IT-385R2 "Disposition of an Income Interest in a Trust"
Subsection 106(2) - Disposition by taxpayer of income interest
Administrative Policy
S6-F2-C1 - Disposition of an Income Interest in a Trust
Offset
1.6 Pursuant to paragraph 106(2)(a), where a taxpayer disposes of an income interest in a trust that includes a right to enforce payment of...
1997 Ruling 3-970604
Where the income beneficiary of a family trust releases and surrenders all her interests in the trust, she will be considered to have disposed of...
ATR-3 (29 Nov. 85)
In winding-up an estate, all the estate assets would be transferred to the capital beneficiaries who would agree to give to their mother (the life...
IT-385R2 "Disposition of an Income Interest in a Trust"
Subsection 106(3) - Proceeds of disposition of income interest
See Also
McKenzie v. The Queen, 2011 DTC 1216 [at 1274], 2011 TCC 289
The testator of a testamentary trust holding shares of a company provided that an executive employee of the company had an entitlement to the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Payment & Receipt | payment through back-to-back promissory notes | 228 |