Tax Elective 2 Flashcards
What is the treatment if you are a part-year resident?
Prorated income and tax credits.
Where doe a fourth appeal get heard?
Supreme court of Canada
Small business deduction is applied to the lesser of:
Taxable Income & Active Business Income & Business Limit
What portion of income has the federal tax abatement applied to it?
The amount earned in that province.
For children under 18 who is deemed to have control of the shares?
The parent.
Corporate Tax Liability if Resident
Worldwide income
Can two corps be associated with different fiscal year ends?
Yes- if associated on one common day.
What are specified shares?
Full voting rights under all circumstances
What happens to R&D on a T2?
Added back
What happens to foreign taxes on a T2?
Added back
What happens to taxes paid on ta T2?
Added back
What happens to pension expense on a T2?
Added back
What happens to club dues on a T2?
Added back
What happens to asset impairment on a T2?
Added back
Landscaping costs are deductible on a T2?
Yes
GRR applies to which income?
Full rate taxable income. (No SBD)
Is property income active or passive?
Passive
What companies does section 85 apply to?
Individual/Corp rollover to New Corp
How is section 85 applied?
Election is filed.
Section 85 residencty requirement?
Resident
What is not allowed in a section 85 rollover?
Real estate portfolios
What must be given for section 85 to be valid?
At least 1 share in exchange.
Boot is?
Non share consideration.
Section 85 - what price can you elect?
Up to FMV or down to Boot
How should A/R be treated on rollover?
Use section 22.
Superficial losses are in effect for how long?
30 days before or after
Superficial losses apply to what?
Shares or other capital properties.
Who do superficial losses apply to?
You - your spouse - other affiliated people
What is done with superficial losses?
Not claimed.
Who/what is affiliated with you?
Spouse - corp of yours our spouse - trusts or funds of yours
How is a superficial loss stopped?
Loss is added to the ACB
An example of a stop loss rule:
Superficial Losses
Are superficial losses applicable to a TFSA?
No - no gain/loss recorded.
Why is an accurate PUC necessary?
Can be returned to shareholder tax free.
Legal Stated Capital is shown where?
On the balance sheet
