Subsection 125(1) - Small business deduction
Cases
Scandia Plate Ltd. v. The Queen, 83 DTC 5009, [1982] CTC 431 (FCTD)
Ownership of the shares of an alleged Canadian-controlled private corporation was not acquired by a Canadian resident from a Swedish company...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Effective Date | 98 | |
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Canadian-Controlled Private Corporation | 20 |
Administrative Policy
20 June 2016 External T.I. 2016-0648481E5 F - Small business deduction and GRIP
CRA accepted that a corporation may choose not to take the small business deduction so as to increase its general rate income pool account,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Adjusted Taxable Income | CCPCs can choose to forego the small business deduction so as to maximize their GRIP | 118 |
92 C.R. - Q.50
A corporation that is a trader in securities is entitled to the small business deduction.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Income of the Corporation for the Year From an Active Business | 24 |
85 C.R. - Q.56
Where a firm performs engineering activities in respect of a project both at its office in Canada and the foreign project site, only income...
IT-73R6 "The Small Business Deduction" 26 March 2002
5 ...In examining the ordinary dictionary meaning of these words, "incident to" generally includes anything that is connected with or related to...
Articles
Perry Truster, "Expanding into the U.S", Tax for The Owner-Manager, Vol. 2, No. 1, January 2002
Ancillary business activities in the U.S., although not carried on through a permanent establishment there, will not give rise to income eligible...
Durnford, "The Distinction Between Income from Business and Income from Property, and the Concept of Carrying on Business", 1991 Canadian Tax Journal, p. 1131.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 129 - Subsection 129(4) - Canadian Investment Income | 0 |
Subsection 125(3) - Associated corporations
See Also
Deneschuk Building Supplies Ltd. v. The Queen, 96 DTC 1467 (TCC)
After the taxpayer had filed a form T2013 allocating the $200,000 business limit between it and another corporation, the Minister reassessed the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(7) | 48 | |
| Tax Topics - Income Tax Act - Section 166 | 30 |
Subsection 125(4) - Failure to file agreement
Articles
Louis, "Family Trusts - Panacea or Ticking Time Bomb?", Canadian Estate Planning and Administration Reporter, August 2, 1994, p. 1
Description of various circumstances in which the use of discretionary trusts can result in corporations becoming associated.
Subsection 125(5.1) - Business limit reduction
Administrative Policy
21 January 2013 External T.I. 2012-046881E5
In response to a query regarding the business limit reduction under s. 125(5.1) in a situation where a Canadian-controlled private corporation was...
Subparagraph 125(6)(b)(ii) [repealed]
Cases
The Queen v. B & J Music Ltd., 83 DTC 5074, [1983] CTC 50 (FCA)
Since the cumulative deduction account is stated to include "the corporation's taxable income" rather than "the corporation's taxable income while...
Subsection 125(7) - Definitions
Active Business Carried On by a Corporation
Administrative Policy
16 November 2004 External T.I. 2004-008194
The activity of leasing portable trailers and equipment would not constitute carrying on a specified investment business as the trailers and...
14 September 2000 External T.I. 2000-003012
A day trader who incorporated his business likely would qualify for the small business deduction.
Business Tax
Canadian-Controlled Private Corporation
Cases
Kaleidescape Inc. v. MNR, 2014 ONSC 4983
In order to try to qualify a Canadian corporation ("K-Can'), which economically was a subsidiary of a U.S. corporation ("K-US"), as a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Rectification & Rescission | clarification that directions to a trustee shareholder were to be made by the mooted CCPC's board rather than a non-resident executive | 395 |
Canada v. Bioartificial Gel Technologies (Bagtech) Inc., 2013 DTC 5155 [at 6361], 2013 FCA 164
In the two taxation years in question, non-residents held 60%, then 70%, of the voting (Class A) shares of the taxpayer. However, provisions of...
Canada v. Perfect Fry Company Ltd., 2008 DTC 6472, 2008 FCA 218
The taxpayer, a Canadian-resident corporation, was wholly owned by a Canadian public corporation ("Perfect Fry") which, in turn, was controlled by...
Sedona Networks Corporation v. Canada, 2007 DTC 5359, 2007 FCA 169
An agreement under which a Canadian-resident private corporation ("Ventures") was accorded the right to exercise, in its sole discretion, the...
Silicon Graphics Ltd. v. Canada, 2002 DTC 7113, 2002 FCA 260
The taxpayer, which was a Canadian corporation with Canadian management, had effected a public offering of its common shares in the U.S. as a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | must be right to affect board or directly influence shareholders | 187 |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(6) | 65 | |
| Tax Topics - Statutory Interpretation - Hansard, explanatory notes, etc. | 23 | |
| Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) | 56 | |
| Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. | 64 |
Parthenon Investments Ltd. v. Canada (National Revenue), 97 DTC 5343 (FCA)
All the voting shares of the taxpayer were owned by a Canadian corporation all of whose voting shares were owned by a U.S. corporation. All the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 44 |
International Mercantile Factors Ltd. v. The Queen, 90 DTC 6390 (FCTD), aff'd 94 DTC 6365 (FCA)
A Canadian-controlled private corporation ("Rieris") held 25% of the common shares of the taxpayer and an additional number of Class A shares...
Scandia Plate Ltd. v. The Queen, 83 DTC 5009, [1982] CTC 431 (FCTD)
"The word 'controlled' as used in the context of the definition means de jure control and not de facto control."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Effective Date | 98 | |
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(1) | 174 |
See Also
Durocher v. The Queen, 2016 DTC 1013 [at 2584], 2015 TCC 297, aff'd 2016 CFA 299
The nine resident-individual taxpayers held all the shares of a Canadian corporation (“RJCG”) directly up until April 2005 and indirectly...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Illegality | potential illegality of an option to acquire control of a private corporation did not nullify the option, so that the corporation was not a CCPC | 171 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | potential illegality of 3rd-party option to acquire control of a subsidiary corporation did not nullify the option, so that the subsidiary was not a CCPC | 201 |
Bioartificial gel technologies (Bagtech) inc. v. The Queen, 2013 DTC 1048 [at 228], 2012 TCC 120, aff'd 2013 FCA 164 supra.
In the two taxation years in question, non-residents held 60%, then 70%, of the voting (Class A) shares of the taxpayer. However, provisions of...
Perfect Fry Company Ltd. v. The Queen, 2007 DTC 588, 2007 TCC 133, aff'd supra 2008 DTC 6472, 2008 FCA 218
Paris J. found (at p. 600) that paragraph (b) of the definition "was not intended to require an attribution of the ownership of shares of a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(c) | 92 |
Avotus Corporation v. The Queen, 2007 DTC 215, 2006 TCC 505
A non-resident shareholder of the taxpayer, who owned one-half of the taxpayer's shares and, by virtue of being chairman, was entitled pursuant to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 70 | |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | 91 | |
| Tax Topics - Income Tax Act - Section 9 - Agency - Agency | 97 |
McClintock v. The Queen, 2003 DTC 576, 2003 TCC 259
The Minister took the position that the taxpayer ceased to be a Canadian-controlled private corporation on July 17, 1990 when it completed an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Shares | 50 |
Administrative Policy
10 June 2016 STEP Roundtable Q. 7, 2016-0634911C6 - Deemed Resident Trust and CCPC Status
A trust which is factually non-resident but which is deemed to be resident in Canada under s. 94(3) controls a Canadian corporation. Would the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) | CCPC status not included in s. 94(3)(a) | 42 |
6 May 2014 CALU Roundtable, 2014-0523301C6 - Control - unanimous shareholders agreement
Does CRA accept Bagtech? After referring to the position in ITTN no. 44) that "unanimous shareholder agreements are not to be considered in...
29 August 2000 Internal T.I. 2000-002318
After noting that a limited partnership with a sole general partner is generally considered to be controlled by that general partner, CRA...
1 September 1995 External T.I. 5-950393
Where a non-resident owns 60% of the voting shares of a Canadian private operating company, that company will not qualify as a Canadian-controlled...
8 December 1994 External T.I. 5-941905
Provided the provisions of ss.265(5.1) and 251(5)(d) do not apply, two non-resident related individuals who each own 50 voting common shares of a...
Income Tax Regulation News, Release No. 3, 30 January, 1995 under "Canadian-Controlled Private Corporation"
The control test envisages situations where over 50% of the shares of the corporation are owned by one or more non-residents or by one or more...
11 September 1992 T.I. (Tax Window, No. 24, p. 15, ¶2202)
A corporation controlled by an individual who is a resident by virtue only of the sojourning rule in s. 250(1)(a) will qualify as a CCPC, assuming...
91 C.R. - Q.9
The ownership of all the common shares of the corporation by a trust all of whose beneficiaries are non-residents will not preclude the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | 21 |
3 October 89 T.I. (March 1990 Access Letter, ¶1153)
s. 256(1.2)(c) relates to whether a corporation is associated, and therefore is not applicable for determining control for purposes of s. 125(7)(b).
3 January 1990 T.I. 5-9256 (Tax Window Files "'Meaning of Canadian-Controlled Private Corporation' - Control Test"
Where a Canadian-resident private corporation owns all the shares of a resident Canadian corporation ("N") which, in turn, owns all the shares of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | 79 |
Income of the Corporation for the Year From an Active Business
Cases
Borstad Welding Supplies (1972) Limited v. The Queen, 94 DTC 6205 (FCTD)
The taxpayer, which owned and operated an industrial gas and welding products business disposed of substantially all the working assets of that...
Freeway Properties Inc. v The Queen, 85 DTC 5183, [1985] CTC 222 (FCTD)
The taxpayer company sold land as part of an active business enterprise. It was found that the sale probably would not have taken place if the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | 71 |
Sedgewick Co-operative Association Ltd. v. The Queen, 83 DTC 5455, [1984] CTC 14 (FCTD)
"Income ... from an active business" in s. 125(1)(a)(i) refers to "income ... from a business" in ss.9(1), 18(1)(a) and 20(1)(u) and accordingly...
The Queen v. Rockmore Investments Ltd., 76 DTC 6156, [1976] CTC 291 (FCA)
The taxpayer, which had no full-time employees and made loans to potential borrowers referred to it by independent agents, was held to be engaged...
E.S.G. Holdings Ltd. v. The Queen, 76 DTC 6158, [1976] CTC 295 (FCA)
The circumstances of this case did not differ materially from Rockmore except that the business activities of the taxpayer were turned over to an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Agency | 34 |
See Also
Muir Cap & Regalia Limited v. Minister of National Revenue, 91 DTC 533, [1991] 1 CTC 2342 (TCC)
The holding by the taxpayer of substantial term deposits for the future purchase of business premises was "only a collateral purpose ... and the...
Newton Ready-Mix Ltd. v. MNR, 89 DTC 595 (TCC)
Funds that were surplus to the day-to-day requirements of the taxpayer's concrete business were invested by it in interest-bearing term deposits....
Administrative Policy
7 March 2002 External T.I. 2001-009178
in finding that cash accumulated to pay annual bonuses to the shareholder-managers was used in the corporation's active business and generated...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | 384 |
19 July 1996 External T.I. 5-960746
In determining whether X Co is a CCPC, where 20% of its shares are held a partnership whose general partner ('Genco") is controlled by a public...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) | 83 |
14 July 1995 External T.I. 5-950791
liclic
"As a general rule, income from a licensing agreement would not be income from an active business because it would be income from a source...
26 July 1995 External T.I. 5-951469
"Where a financing arrangement that is fundamental to the business operations requires certain security to be maintained and it is reasonable to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation | 104 |
28 April 1993 T.I. 930165 (C.T.O. "Franchise Royalty Income - Active Business")
Discussion of whether lump sum payments received by a franchisor from its franchisees are income from an active business. "If no significant...
92 C.R. - Q.50
Interest or dividend income derived by a corporation that is a trader in securities would pertain to or be incident to its active business.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(1) | 15 |
29 June 1992 T.I. 920958 (December 1992 Access Letter, p. 25, ¶C117-178)
The return of surplus from a pension plan to the employer would constitute active business income provided that the employer's contributions to...
November 1991 Memorandum (Tax Window, No. 13, p. 14, ¶1584)
Funds which a CCPC raises by issuing flow-through shares which require the funds to be expended within 24 months on CEE, etc. will be considered...
90 C.R. - Q56
Recapture of CCA which arises after cessation of a business will be considered to be income whose source is the business in which the asset was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Personal Services Business | 27 | |
| Tax Topics - Income Tax Act - Section 67 | 10 |
October 1989 Revenue Canada Round Table - Q.15 (Jan. 90 Access Letter, ¶1075)
In determining whether term deposits of a corporation which are required as collateral to obtain a line of credit are used in an active business,...
October 1989 Revenue Canada Round Table - Q.17 (Jan. 90 Access Letter, ¶1075)
Where a corporation leases a building to its wholly-owned subsidiary that uses it in its business, with the result that the rent received by the...
IT-73R4 "The Small Business Deduction - Income from an Active Business, a Specified Investment Business and a Personal Services Business".
Personal Services Business
Cases
Dynamic Industries Ltd. v. Canada, 2005 DTC 5293, 2005 FCA 211
The sole employees of the taxpayer were its sole shareholder ("Martindale") who provided the services of an iron worker and construction manager,...
See Also
Ivan Cassell Limited v. The Queen, 2016 TCC 53
The taxpayer (“ICI”) was owned 75% by an executive (Mr. Cassell) and 25% by his spouse and daughter. ICI derived most of its revenues as fees...
C. J. McCarty Inc. v. The Queen, 2015 TCC 201
The taxpayer ("CJ") was a Canadian corporation owned by an engineer ("McCarty"), his wife and their daughter. CJ entered into a series of three...
9016-9202 Quebec Inc. v. The Queen, 2014 TCC 281
Until 1995, a Quebec garbage collection company ("EBI") employed its garbage collectors and drivers. It then encouraged most of them to each...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 163 - Subsection 163(2) | CRA used penalty as lever to terminate tax avoidance structure | 185 |
G & J Muirhead Holdings Ltd. v. The Queen, 2014 DTC 1067 [at 3009], 2014 TCC 49 (Informal Procedure)
The taxpayer was owned by its sole employee ("Muirhead") and his wife, and provided well inspection services to an arm's length corporation...
Gomez Consulting Ltd. v. The Queen, 2013 DTC 1125 [at 670], 2013 TCC 135 (Informal Procedure)
Bédard J found that the taxpayer, wholly owned by an individual ("Almeida"), was operating a personal services business, given that:
- the...
9098-9005 Quebec Inc. v. The Queen, 2012 DTC 1284 [at 3864], 2012 TCC 324
The taxpayer's director ("Mr. Gitman") and his two sisters inherited equal interests in a number of rental properties and a business, which they...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Office | officer of partnership | 209 |
| Tax Topics - Income Tax Act - Section 96 | 137 |
Peter Cedar Products Ltd. v. The Queen, 2009 DTC 1314, 2009 TCC 463
The principal salesmen and purchasing agents for a brokerage corporation whose business was transacting in cedar shakes and shingles established a...
Robertson v. The Queen, 2009 DTC 679, 2009 TCC 183
The individual taxpayer was the sole shareholder of the corporate taxpayer ("RREL") which, in turn, provided the engineering services of the...
489599 B.C. Ltd v. The Queen, 2008 DTC 4107, 2008 TCC 332
The taxpayer was not carrying on a personal services business given that in addition to five full-time employees it had two part-time employees.
Carreau v. The Queen, 2008 DTC 3106, 2006 TCC 20
A corporation ("9043") of which an individual was the sole shareholder, officer and employee, and which was retained by a contractor of Hydro...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) | 126 |
W. B. Pletch Company Limited v. The Queen, 2006 DTC 2065, 2005 TCC 400
The taxpayer was owned by an individual ("Pletch") and his wife. Pletch served as the president and then as vice-president and director of a...
Galaxy Management Ltd. v. The Queen, 2005 DTC 1558, 2005 TCC 674
The taxpayer, through its key employee, provided sales and purchase services to two companies engaged in the manufacture of knitted garments and...
S & C Ross Enterprises Ltd. v. The Queen, 2002 DTC 2078 (TCC)
The sole shareholder ("Ross") of the taxpayer served as the CFO of a Canadian company ("Clearly Canadian") and also performed services on behalf...
Bruce E. Morley Law Corp. v. The Queen, 2002 DTC 1547 (TCC)
The shareholder of the taxpayer, who previously had been a partner in a law firm providing, or supervising the provision of, the bulk of legal...
Placements Marcel Lapointe Inc. v. MNR, 93 DTC 821 (TCC)
A business of providing construction cost appraisal services, which the taxpayer provided to a corporation through the services of its president...
Crestglen Investments Ltd. v. MNR, 93 DTC 462 (TCC)
An officer and specified shareholder of the taxpayer who provided services to a partnership through an office in her home would not have been...
Société de Projets ETPA Inc. v. MNR, 93 DTC 516 (TCC)
The taxpayer, through the services of its shareholder, prepared advertising brochures and folders for various clients, and had the printing work...
David T. McDonald Co. Ltd. v. MNR, 92 DTC 1917 (TCC)
The voting preferred shares of the taxpayer were held by Mr. McDonald and its common shares were held by his wife and children. In finding that if...
533702 Ontario Ltd. v. MNR, 91 DTC 982 (TCC)
The taxpayer, which purportedly provided services to the third-party customers of the plumbing business of a corporation ("BPH") owned by the...
Administrative Policy
28 November 2010 CTF Roundtable Q. 21, 2010-0386361C6 - 2010 CTF Q21 - Reasonable Salary for Inc. Prof.
CRA stated that para. 1(j) of IT-189R2 ("Corporations Used by Practising Members of Professions") and para. 17 of IC 88-2 ("General Anti-Avoidance...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 121 |
Income Tax Technical News, No. 41, 23 December 2009
Under the "more than five full-time employees test", CRA accepts that the test is met when a corporation has five full-time employees plus one or...
2004 Ruling 2004-008431
A professional partnership is converted to a Canadian-controlled private corporation ("Newco") pursuant to ss.85(2) and (3) and former partners...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 93 | |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(2) | 93 |
90 C.R. - Q56
Recapture of CCA which arises after cessation of a business will be considered to be income whose source is the business in which the asset was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Income of the Corporation for the Year From an Active Business | 27 | |
| Tax Topics - Income Tax Act - Section 67 | 10 |
1 February 1999 T.I. 982371
"It is generally the Department's view that a foreign corporation is a 'person' for purposes of the Act unless the context clearly indicates...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Person | 52 | |
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(1) - Paragraph 256(1)(a) | 52 |
17 December 1996 T.I. 963605
A foreign corporation is a "corporation" and a "person" for purposes of the Act.
26 February 1991 T.I. (Tax Window, Prelim. No. 3, p. 5, ¶1128)
S.125(7)(d) does not require that the individuals be reasonably regarded as officers or employees of the corporation with respect to the services...
11 September 89 T.I. (February 1990 Access Letter, ¶1122)
Opco, which has imposed a hiring freeze, nonetheless would like to engage services of Mr. A to complete a specific project over a 2-year period on...
IT-73R4 "The Small Business Deduction - Income from an Active Business, a Specified Investment Business and a Personal Services Business".
IT-168R3 "Athletes and Players Employed by Football, Hockey and Similar Clubs" under "Personal Services Business" and under "Endorsements and Public Appearances"
Articles
Michael Gemmiti, "Placement Agencies: Insurable and Pensionable Employment", Canadian Tax Highlights", Vol. 22, No. 3, March 2014, p. 10.
Source deduction liability of placement agency (p. 10)
A placement or employment agency is potentially liable to make contributions under the...
Sophie Virji, "Old News, New Trend: Personal Services Business on the Rise", CCH Tax Topics, Number 2192, March 13, 2014, p. 1.
Ubiquity of oil field independent contracors (p.1)
[O]il and gas producers…have often outsourced their oil field work to corporations owned by...
Specified Investment Business
Cases
Weaver v. Canada, 2008 DTC 6517, 2008 FCA 238
The taxpayers each owned 25% of the shares of a Canadian-controlled private corporation ("SRP") that headleased reserve land from an Indian band...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation | previous active business not relevant | 97 |
Baker v. Canada, 2005 DTC 5266, 2005 FCA 185
Six individuals employed as custodians for the purpose of providing cleaning services to tenants of the taxpayer, and who worked from 6 p.m. to 10...
Lerric Investments Corp. v. Canada, 2001 DTC 5169, 2001 FCA 14
The taxpayer, which employed two full-time employees directly, also had fractional co-ownership interests in eight apartment projects which also...
See Also
0742443 B.C. Ltd. v. The Queen, 2014 DTC 1208 [at 3811], 2014 TCC 301, aff'd 2015 DTC 5115 [at 6304], 2015 FCA 231
The taxpayer, which had two employees including its shareholder, carried on a storage unit rental business.
Before referring to the "principal...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Onus | Minister's pleading of assumptions of law does not relieve taxpayer from entering a case | 106 |
R&C Commrs v. Lockyer & Anor (for Pawson Estate), [2013] UKUT 050 (Tax and Chancery Chamber)
The deceased taxpayer and her three children held equal interests in a bungalow ("Fairhaven"), which they rented out as a holiday property. The...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Investment Business | 385 |
Langille v. The Queen, 2009 DTC 1103 [at 564], 2009 TCC 139
The taxpayer who was the sole director and officer of a corporation ("Alland") owned by him and a family trust, lent money in order for Alland to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | 139 |
Lee v. The Queen, 99 DTC 925 (TCC)
A corporation whose business was the operation of a 68-pad mobile home park on land which it owned was found to be carrying on a specified...
Ben Raedarc Holdings Ltd. v. The Queen, 98 DTC 1218 (TCC)
Margeson TCJ. found (at p. 1225) that janitors "who worked all or substantially all of four hours per day, five days a week, throughout the years...
Rogers v. The Queen, 97 DTC 890 (TCC)
A corporation that derived virtually all its income from the rental of a shopping centre owned by it was found to be engaged in a specified...
Canwest Capital Inc. v. The Queen, 97 DTC 1 (TCC)
A sum of $5 million was injected into the taxpayer with a view to being utilized in leasing activities. The portion of the sum that the taxpayer...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 129 - Subsection 129(1.2) | 85 |
Crompton v. The Queen, 96 DTC 1700 (TCC)
A corporation owned by the taxpayer and his wife that did a high volume of trading in securities on the Vancouver Stock Exchange was found to be a...
The Queen v. Hughes & Co. Holdings Ltd., 94 DTC 6511
A practising lawyer who spent approximately 28 hours per year on telephone calls monitoring the business of the taxpayer in addition to making...
Temax Investments Inc. and Mayon Investments Inc. v. Minister of National Revenue, 91 DTC 364, [1991] 1 CTC 2245 (TCC)
The business of the taxpayers which consisted of providing mortgage financing on the security of second, third and fourth mortgages was found to...
Administrative Policy
23 January 2008 Internal T.I. 2007-0258011I7
Aco, a Canadian-controlled private corporation, holds rental apartment complexes, and an interest in a partnership (between it and two related...
26 March 2001 External T.I. 2001-006392
A corporation whose only business was the purchase of accounts receivable from an associated corporation at a discount and the collection of those...
21 February 2001 External T.I. 2000-0047815
A property management corporation also hold a minority interest in several partnerships whose only activity is holding rental property. The...
19 January 1998 External T.I. 5-983095
A pawnbroker fees would be considered to be interest for the purpose of determining whether a pawnbroker business is a specified investment business.
26 September 1997 T.I. 972291 [income from copyrighted music]
"If a company is in the business of composing music, the income it earns with respect to its copyrighted music would generally be considered...
9 October 1996 T.I. 962919 (C.T.O. "Specified Investment Business")
The leasing of taxi licences to arm's length parties is a specified investment business unless there are more than five full-time employees.
17 July 1995 External T.I. 5-950413
"In the case of a corporation which carries on a business involving tennis courts and has a weight/exercise room the extent of the services it...
31 March 1995 External T.I. 5-950121
"It is our opinion that normally a full-service motel operation would be providing a sufficient level of services such that it would not be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation | 98 |
27 March 1995 T.I. 943010 (C.T.O. "Specified Inv. Bus.")
No relief is provided in the situation where, for a portion of the year, there are only five full-time employees rather than six.
14 July 1994 External T.I. 5-941149
A partnership having less than six full-time employees that is engaged principally in providing rental spaces for mobile homes and offers no more...
24 March 1994 External T.I. 5-940124
A taxpayer that rents storage facilities to clients who use the facilities to store raw materials used by them in their manufacturing activities...
3 March 1994 External T.I. 5-933293
Although offering a motel, with rooms rented on a daily basis and services provided, will be an active business, it will be a specified investment...
4 February 1994 T.I. 932524 (C.T.O. "Small Business Corporation")
In applying the five full-time employee test with respect to a partner's income from the particular partnership, each full-time employee of the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation | 120 |
91 C.R. - Q.31
Where a corporation has more than five full-time employees, whether interest income is derived from a specified investment business will turn upon...
21 August 1991 T.I. (Tax Window, No. 8, p. 18, ¶1400)
Where a corporation provides rental storage facilities and a moving operation, it is a question of fact whether it is conducting an active...
26 June 1991 T.I. (Tax Window, No. 4, p. 25, ¶1316)
Where a corporation employs three employees in its real estate rental operation and three more who are licensed real estate brokers, it is a...
26 February 1990 T.I. (July 1990 Access Letter, ¶1332)
Generally speaking, royalty income is income from property. However, where it is incidental to an active business carried on by the recipient...
19 September 89 T.I. (February 1990 Access Letter, ¶1123)
A corporation which conducts a seasonal business which employs 10 to 15 employees for six months and 2 or 3 employees for the rest of the year...
11 September 89 T.I. (February 1990 Access Letter, ¶1123)
Where a corporation which is one of a group of corporations in the business of leasing rental properties employs a 7-man maintenance crew which...
88 C.R. - Q.51
Each full-time employee of a particular partnership will be considered to be a full-time employee of each corporate partner. In the case of a...
81 C.R. - Q.30
A corporation may carry on more than one business, one of which may give rise to income from an active business, and another which may give rise...
IT-73R4 "The Small Business Deduction - Income from an Active Business, a Specified Investment Business and a Personal Services Business".
Specified partnership income
Administrative Policy
6 May 2016 External T.I. 2016-0646411E5 - Professional corporation & small business deduction
CRA noted that the 2016 Budget proposes to extend the specified partnership income rules to partnership structures in which a Canadian-controlled...
2012 Ruling 2011-0392041R3 - Incorporation of a Professional Partnership
Ss. 85(2) and(3) Partnership conversion to Newco
All the "Partners" of a professional partnership (the "Partnership") are resident in Canada and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(3) | non s. 85(2) property allocated exclusively to liability assumption, and share/note consideration pre-allocated | 362 |
2013 Ruling 2013-0498961R3 - Partner creating a professional corporation
underline;">: Existing structure. The professional partnership in question already has Non-Incorporated Partners who provide their Professional...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 256 - Subsection 256(2.1) | incorporated partners of professional partnership | 114 |
25 February 2014 External T.I. 2012-0448431E5 - Reporting of Income by Estate
A Canadian-controlled private corporation (Corp) is a member of a top-tier holding partnership (Partnership A) which is a direct member of two...
2012 Ruling 2012-0447491R3 - Professional corporation contracting with partshp
Equity partners of a law firm amend their partnership agreement to allow an equity partner to elect to provide his or her professional services...
2011 Ruling 2011-0407891R3 - Professional corporation contracting with partnership
Physicians who are associated with a hospital but are stated not to be employees of the hospital and all of whom have an academic appointment at...
Subsection 125(10)
Administrative Policy
29 November 2016 CTF Roundtable Q. 15, 2016-0669731C6 - The New SBD provisions
Opco carries on an active business using real estate rented to it (at an annual rental of $150,000) by Rentco (owned by the same shareholder), and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 129 - Subsection 129(6) | sharing of business limit where no specified income | 53 |