All About Estates

Category: Investments

Total 70 Posts

Capital Gains Exemption Purification before a Share Sale: Be Careful about Timing

Assume a family trust (“Trust”) which has a December year end owns 100% of an operating company (“opco”). A separate corporation (“holdco”), owned by the founders of opco, is a corporate beneficiary of the Trust. Opco is up for sale. Opco has excess funds which may affect the Trust’s and…

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Charitable Donations – What Do You Get in Return?

Each December, we are reminded that this is the season of giving. As we are encouraged to lend our support to worthy causes, it is helpful to understand the extent to which donors can control the use of their funds and oversee the direction of a charitable project. Meddling in…

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Requirement to File a Tax Return Expanded

As written previously, the requirement to file a tax return for trusts has been expanded. Thanks to new legislation, there are now exceptions to the exception to file. Generally speaking, a trust (other than a trust established by law or judgment) that is resident in Canada must file a tax…

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Source of Income and the TOSI Rules: Clarification?

Since the Tax on Split Income (“TOSI”) legislation was released, there has been considerable consternation amongst professionals as to how the rules apply. Even the most sophisticated readers of the legislation agree that it contains provisions that are both ambiguous and somewhat complicated. Somewhat out of exasperation, many deal with…

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Fair Market Value Used to Test the Meaning of All or Substantially All of the Assets Used in an Active Business

Under The Income Tax Act (“ITA”), if a taxpayer disposes of property that is all or substantially all of the assets used in an active business for consideration that includes shares of a corporation, the shares are deemed to be capital property. The disposal is considered to be a capital…

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PLANNING AND ESTATE PLANNING FOR THE DISPOSITION OF REAL ESTATE

I am in the middle of a very difficult Canada Revenue Agency audit of a taxpayer’s claim for the principal residence exemption. It now appears the property in question,  built by my client some 25 years ago may not qualify for the full exemption due to the fact that the…

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TFSA’s and Residency

Recently, one of my blog colleagues wrote on the residency rules regarding tax free saving accounts (TFSA’s). Generally, as an owner of TFSA, if you leave Canada, the accumulated funds may remain in the TFSA without Canadian tax consequences. You can’t make any further contributions but you can make withdrawals….

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Life Insurance and Contingent Ownership

Ownership of assets into ‘joint tenancy with right of survivorship” is a mechanism of ownership transfer commonly used for estate planning to address such issues as probate fee and tax avoidance. Recently, this blog site very capably addressed the issues surrounding “joint tenancy” of life insurance in particular (“Life Insurance…

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Inheritances and Taxes – Be Careful Where you Step?

Frequently, I am reminded how careful one has to be with making sure that tax-free inheritances generally maintain their status throughout all steps to liquidate and realize the proceeds. Here is a case in point. In Owen v The Queen (2018 TCC 90), the taxpayer’s father resided in the United…

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Income Splitting Loans: What’s the Use?

We have blogged about income splitting arrangements available to individuals who wish to loan funds to his/her lower income spouse or adult child, or in the case of minor children, a discretionary family trust. Such loans would be used to invest in income producing properties such marketable securities, mutual funds,…

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