Canadian Tax Principles

Byrd & Chen’s Canadian Tax Principles 2020–2021 Edition, Volume I
	Copyright
	Contents
	Preface
	Acknowledgments
	CHAPTER 1: Introduction To Federal Taxation In Canada
		The Canadian Tax System
			Alternative Tax Bases
			Taxable Entities In Canada
			Federal Taxation And The Provinces
		Tax Policy Concepts
			Taxation And Economic Policy
			Taxation And Income Levels
			Tax Incidence
			Tax Expenditures
			Qualitative Characteristics Of Tax Systems
		Income Tax Reference Materials
			Introduction
			The Income Tax Act
			Other Income Tax Legislation
			Other Sources Of Income Tax Information
		Liability For Part I Income Tax
			Background
			Charging Provision For Canadian Residents
			Charging Provision For Non-Residents
		Residence
			Importance
			Residence Of Individuals
			Residence Of Corporations
			Residence Of Trusts
		Alternative Concepts Of Income
			The Economist’s View
			The Accountant’s View
			The Income Tax Act View
		Net Income For Tax Purposes
			Structure
			Components
			Combining The Components - ITA Section 3
			Loss Carry Overs
			Net Income For Tax Purposes - Example
		Net Income To Taxable Income
		Principles Of Tax Planning
			Introduction
			Tax Avoidance Or Reduction
			Tax Deferral
			Income Splitting
		Abbreviations To Be Used
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 2: Procedures And Administration
		Introduction
		Administration Of The Department
		Returns And Payments - Individuals
			Requirement To File - ITA 150
			Due Date For Individual Returns
			Withholdings For Income Tax - ITA 153
			Instalment Payments For Individuals - ITA 156
			Interest
			Penalties
			Due Date For Balance Owing - Living Individuals
			Deceased Taxpayers - Balance Due Dates And Final Returns
		Returns And Payments - Corporations
			Due Date For Corporate Returns - ITA 150
			Filing Alternatives For Corporations
			Instalment Payments For Corporations
			Due Date For Balance Owing - Corporations
			Interest And Penalties For Corporations
		Returns And Payments - Trusts
			Types Of Trusts
			Filing Requirements
			Due Dates For Returns
			Payment Of Taxes
			Interest And Penalties
		Income Tax Information Returns
		Books And Records
		Assessments And The CRA My Account Service
			CRA Website - My Account Service
			Notice Of Assessment
			Notice Of Reassessment
		Refunds
		Adjustments To Income Tax Returns
		Disputes And Appeals
			Representation By Others
			Informal Request For Adjustments
			Notice Of Objection
			Tax Court Of Canada
			Federal Court And Supreme Court Of Canada
		Tax Evasion, Avoidance, And Planning
			Tax Evasion
			Tax Avoidance And Tax Planning
			General Anti-Avoidance Rule (GAAR)
		Collection And Enforcement
			Taxpayer Property
			Collections
			Other Penalties
		Taxpayer Relief Provisions
			Fairness Package
			Voluntary Disclosure
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 3: Income Or Loss From An Office Or Employment
		Employment Income Defined
			General Rules
			Cash Basis And The Use Of Bonus Arrangements
			Net Concept
		Employee Versus Self-Employed
			Introduction
			Employee Perspective
			Employer Perspective
			Making The Distinction
		Inclusions - Employee Benefits
			Basic Concepts
		Inclusions - Salaries And Wages
		Inclusions - Non-Salary Benefits
			Introduction
			Legislative Guidance
			Non-Legislative Guidance
			Tax Planning Considerations
		Inclusions - GST/HST/PST On Taxable Benefits
		Inclusions - Automobile Benefits
			Employees And Automobiles
			Taxable Benefits - Standby Charge
			Operating Cost Benefit
			Payments By Employee For Automobile Use
			Summary Of Automobile Benefit Calculations
			Example - Employer Owned Automobile
			Example - Employer Leased Vehicle
			Employer Provided Cars And Tax Planning
		Inclusions - Allowances
			Allowance Vs. Reimbursement
			General Rules
			Taxable Vs. Non-Taxable Allowances
			Reasonable Allowances For Motor Vehicles
			Employer’s Perspective Of Allowances
			Employee’s Perspective Of Allowances
		Inclusions - Employee Insurance Benefits
			Life Insurance
			Disability Insurance (a.k.a. Group Sickness Or Accident Insurance Plans)
		Loans To Employees
			General Rules
			Tax Planning For Interest Free Loans
		Inclusions - Stock Option Benefits
			The Economics Of Stock Option Arrangements
			Overview Of The Tax Rules
			CCPCs Vs. Public Companies
			Rules For Public Companies
			Rules For Canadian Controlled Private Corporations (CCPCs)
		Other Inclusions
			Payments By Employer To Employee
			Forgiveness Of Employee Loans
			Housing Loss Reimbursement
			Discounts On Employer’s Merchandise
		Specific Deductions
			Overview
			Salesperson’s Expenses Under ITA 8(1)(f)
			Travel Expenses And Motor Vehicle Costs Under ITA 8(1)(h) and 8(1)(h.1)
			The Salesperson’s Dilemma
			Other Expenses Of Performing Duties Under ITA 8(1)(i)
			Automobile And Aircraft Expenses Under ITA 8(1)(j)
			Work Space In The Home Costs For Employees
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 4: Taxable Income And Tax Payable For Individuals
		Introduction
		Taxable Income Of Individuals
			Available Deductions
			Ordering Of Deductions
			Deductions For Payments - ITA 110(1)(f)
			Northern Residents Deductions - ITA 110.7
		Calculation Of Tax Payable
			Federal Tax Payable Before Credits
			Provincial Tax Payable Before Credits
			Types Of Income
			Taxes On Income Not Earned In A Province
		Calculating Tax Credits
			Federal Amounts
			Provincial Amounts
		Personal Tax Credits - ITA 118(1)
			Basic Personal Amount (BPA) - ITA 118(1.1)
			Individuals With A Spouse Or Common-Law Partner - ITA 118(1)(a)
			Individuals Supporting A Dependent Person - ITA 118(1)(b)
			Canada Caregiver Amount For Child - ITA 118(1)(b.1)
			Single Persons (Basic Personal Tax Credit) - ITA 118(1)(c)
			Canada Caregiver Tax Credit - ITA 118(1)(d)
		Other Tax Credits For Individuals
			Age Tax Credit - ITA 118(2)
			Pension Income Tax Credit - ITA 118(3)
			Canada Employment Tax Credit - ITA 118(10)
			Adoption Expenses Tax Credit - ITA 118.01
			Digital News Subscriptions Credit - ITA 118.02
			Home Accessibility Tax Credit - ITA 118.041
			First-Time Home Buyer’s Tax Credit - ITA 118.05
			Volunteer Firefighters And Volunteer Search And Rescue Workers Tax Credits - ITA 118.06 And 118.07
			Charitable Donations Tax Credit - ITA 118.1
			Medical Expense Tax Credit - ITA 118.2
			Disability Tax Credit - ITA 118.3
			Education Related Tax Credits
			Employment Insurance (EI) And Canada Pension Plan (CPP) Tax Credits - ITA 118.7
			Overpayment Of EI Premiums And CPP Contributions
			Transfers To A Spouse Or Common-Law Partner - ITA 118.8
			Political Contributions Tax Credits - ITA 127(3)
			Labour Sponsored Venture Capital Corporations Credit - ITA 127.4
			Dividend Tax Credit
			Foreign Tax Credits
			Investment Tax Credits
		Refundable Credits
			Introduction
			GST/HST Credit - ITA 122.5
			Refundable Medical Expense Supplement - ITA 122.51
			Canada Workers Benefit - ITA 122.7 (Formerly Working Income Tax Benefit)
			Refundable Teacher And Early Childhood Educator School Supply Tax Credit - ITA 122.9
			Climate Action Incentive Payments
			Canada Training Credit - ITA 122.91
		Social Benefits Repayment (OAS And EI)
			Basic Concepts
			Employment Insurance (EI) Benefits Clawback
			Old Age Security (OAS) Benefits Clawback
		Comprehensive Example
		Key Terms Used In This Chapter
		References
		Sample Tax Return And Tax Software SS Problem
		Problems For Self Study (Online)
		Assignment Problems
		Tax Software Assignment Problems
	CHAPTER 5: Capital Cost Allowance
		Note On Eligible Capital Expenditures
		Capital Cost Allowance System
			General Rules
			Tax And Accounting Procedures Compared
		Additions To Capital Cost
			Determination Of Amounts
			Available For Use Rules
			Segregation Into Classes
		Capital Cost Allowances
			General Overview
			Rates For Commonly Used CCA Classes
			Half-Year Rules (a.k.a. First Year Rules)
			Accelerated Investment Incentive (AccII)
			Zero Emission Vehicles
			Short Fiscal Periods
			Class 14.1
			Tax Planning Considerations For CCA
		Dispositions Of Depreciable Assets
			Overview Of Procedures
			Capital Gains
			Recapture Of Capital Cost Allowance
			Terminal Losses
			Dispositions Of Class 54 Assets (Zero Emission Vehicles)
			Dispositions Of Class 14.1 – Differences From Other Classes
			Summary Of Disposition Tax Consequences
		CCA Schedule
		CCA Determination - Special Situations
			Separate Class Election
			Change In Use For Automobiles
			Other Special Situations
		Key Terms Used In This Chapter
		References
		Appendix - CCA Rates For Selected Assets
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 6: Income Or Loss From A Business
		Overview
			Classification Of Income
		Business Income Vs. Property Income
			Tax Consequences Of Classification
			Business Income Defined
			Property Income Defined
		Business Income Vs. Capital Gains
			Tax Consequences Of Classification
			Capital Gains Defined
			Criteria For Identifying Capital Gains
		Business Income And GAAP
		Business Income - Inclusions (Revenues)
			Inclusions In Business Income -Income Tax Act Provisions
			Amounts Received And Receivable
			Reserves
			Other Inclusions
		Limitations On Deductions From Business And Property Income
			General Approach - Restrictions In ITA 18 Through ITA 19.1
			Specific Limiting Items Under ITA 18
			Foreign Media Advertising - ITA 19 And 19.1
		Limitations On Deductions From Business, Property, And Employment Income
			Introduction
			Reasonableness
			Meals And Entertainment
			“Luxury” Automobile Costs
			Automobiles Owned By The Taxpayer
			Automobile Leasing Costs - ITA 67.3
			Leasing Property
			Illegal Payments, Fines And Penalties - ITA 67.5 And 67.6
		Business Income - Specific Deductions
			Inventory Valuation (Cost Of Sales)
			Other Deductions
		Reconciliation Schedule
		Business Income - Example
			Example Data
			Example Analysis
		Taxation Year
			General Rules
			Unincorporated Businesses - Non-Calendar Fiscal Year
		Special Business Income Situations
			Income For Farmers
			Professional Income (Billed Basis Of Recognition)
			Sale Of A Business
			Scientific Research And Experimental Development
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 7: Income From Property
		Introduction
		Property Income: General Concept
		Interest As A Deduction
			The Problem
			IT Folio S3-F6-C1 “Interest Deductibility”
			What Is Interest?
			Legislation
			Borrowed To Produce Income
			Direct Or Indirect Use
			Discount And Premium On Long Term Issued Debt
		Interest Income
			General Provision
			Corporations And Partnerships - Full Accrual Method
			Individuals - Modified Accrual Method
			Discount And Premium On Long Term Debt Holdings
			Accrued Interest At Transfer
		Payments Based On Production Or Use (Royalties)
		Rental Income
			General Rules
			Capital Cost Allowances
			Rental Income Example
		Cash Dividends From Taxable Canadian Corporations
			The Concept Of Integration
			Implementing Integration
			Gross Up And Tax Credit Procedures-Eligible Dividends
			Gross Up And Tax Credit Procedures-Non-Eligible Dividends
		Income Trusts
			How Do Trusts Work?
			Investments In Publicly Traded Trusts
			Taxation Of Real Estate Investment Trusts (REITs)
		Mutual Funds
			Objective
			Organization
			Distributions
			Adjusted Cost Base
		Other Types Of Dividends
			Capital Dividends
			Stock Dividends
		Foreign Source Income
			General Rules
			Foreign Non-Business (Property) Income
			Foreign Business Income
		Shareholder Benefits
		Tax Credits Revisited
			Dividend Tax Credits
			Foreign Income Tax Credits
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 8: Capital Gains And Capital Losses
		Economic Background
			Capital Assets And Income Taxation Policy
			Lifetime Capital Gains Deduction
			Changes In The Inclusion Rate
		General Rules
			Capital Gains In The Income Tax Act
			Capital Gains Defined
			Dispositions
			Proceeds Of Disposition
			Adjusted Cost Base
			Calculating The Capital Gain Or Loss
		Detailed Application Of The Rules
			Identical Properties
			Partial Dispositions
			Warranties On Capital Assets
			Capital Gains Reserves
			Bad Debts On Sales Of Capital Property
			Special Rule For Sales Of Real Property
		Provisions For Special Assets
			Principal Residence
			Personal Use Property
			Listed Personal Property
			Gains And Losses On Foreign Currency
			Options - ITA 49
		Deemed Dispositions - Change In Use
			General Rules
			Business To Personal Use
			Personal To Business Use
			Example - Change In Use
			Special Rules For Principal Residences
			Special Rules For Automobiles
		Deemed Dispositions - Departures From Canada
		Deferral Provisions On Small Business Investments
			Basic Provision
			Definitions
			Example
		Deferral Provisions On Replacement Property
			The Problem
			Voluntary And Involuntary Dispositions
			Timing Considerations
			Application Of ITA 44(1) To Capital Gains
			Application Of ITA 13(4) To Recapture Of CCA
			Combined Application Of ITA 13(4) And 44(1)
		Capital Gains And Tax Planning
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 9: Other Income, Other Deductions, And Other Issues
		Introduction
			Coverage Of Chapter 9
		Other Income - Subdivision d Inclusions
			Pension Benefits - ITA 56(1)(a)(i)
			Retiring Allowances - ITA 56(1)(a)(ii)
			Death Benefits - ITA 56(1)(a)(iii)
			Income Inclusions From Deferred Income Plans -ITA 56(1)(h), (h.1), (h.2), (i), and (t)
			Scholarships And Prizes - ITA 56(1)(n)
			Research Grants - ITA 56(1)(o)
			Social Assistance And Workers’ Compensation Payments - ITA 56(1)(u) And (v)
		Other Deductions - Subdivision e Deductions
			CPP Contributions On Self-Employed Earnings - ITA 60(e) and ITA 60(e.1)
			Moving Expenses - ITA 62
			Child Care Expenses - ITA 63
			Disability Supports Deduction - ITA 64
		Related Inclusions And Deductions
			Introduction
			Employment Insurance Benefits - ITA 56(1)(a)(iv) And 60(n)
			Pension Income Splitting - ITA 56(1)(a.2) And 60(c)
			Spousal And Child Support - ITA 56(1)(b) And 60(b)
			Annuity Payments Received - ITA 56(1)(d) And 60(a)
		Registered Savings Plans
			Introduction
			Tax Free Savings Accounts (TFSAs)
			Registered Education Savings Plans (RESPs)
			Registered Disability Savings Plans (RDSPs)
		Non-Arm’s Length Transfers Of Property
			Introduction
			Inadequate Considerations - ITA 69
			Inter Vivos Transfers To A Spouse - ITA 73(1) And 73(1.01)
			Non-Arm’s Length Transfers Of Depreciable Assets - ITA 13(7)(e)
			Inter Vivos Transfer Of Farm Or Fishing Property To A Child
		Death Of A Taxpayer
		Income Attribution
			The Problem
			Basic Rules - ITA 74.1(1) And (2)
			Avoiding Income Attribution
			Income Attribution - Other Related Parties
			Anti-Avoidance Provisions
			Tax Planning And Income Attribution
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 10: Retirement Savings And Other Special Income Arrangements
		Planning For Retirement
			Introduction
			Providing Consistency
			Tax Deferred Savings
			Defined Benefit Vs. Money Purchase Plans
		Registered Retirement Savings Plans (RRSPs)
			Basic Operations
			RRSP Deduction Limit
			Examples Of RRSP Deduction Calculations
			Undeducted RRSP Contributions
			RRSP And RRIF Administration Fees
			RRSP Withdrawals And Voluntary Conversions
			Involuntary Termination Due To Age Limitation
			Spousal RRSP
			Home Buyers’ Plan (HBP)
			Lifelong Learning Plan (LLP)
			Departure From Canada
			Death Of The RRSP Registrant
		Registered Pension Plans (RPPs)
			Establishing An RPP
			Employer Contributions To The RPP
			Employee Contributions To The RPP
			Options At Retirement
			Phased Retirement
			Inadequate Retirement Savings
		Registered Retirement Income Funds (RRIFs)
			Establishment
			RRIF Withdrawals
			Death Of The RRIF Registrant
			Evaluation Of RRIFs
		Deferred Profit Sharing Plans
			General Rules
			Tax Planning
		Profit Sharing Plans
			General Rules
			Part XI.4 Tax On Excess PSP Contributions
		Transfers Between Plans
			Accumulated Benefits
			Retiring Allowances
		Retirement Compensation Arrangements
			The Problem
			Arrangements Defined
			Part XI.3 Refundable Tax
		Salary Deferral Arrangements
			The Problem
			The Solution
		Individual Pension Plans (IPPs)
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	Index
Byrd & Chen’s Canadian Tax Principles 2020–2021 Edition, Volume II
	Copyright
	Contents
	Preface
	CHAPTER 11 : Taxable Income And Tax Payable For Individuals Revisited
		Introduction
			The Problem
			Our Solution
		Taxable Income Overview
		Lump Sum Payments
			The Problem
		Treatment Of Losses
			Carry Over Provisions
			Personal Use Property Losses
			Listed Personal Property Losses
			Non-Capital Losses
			Net Capital Losses
			Net Capital Losses At Death
			Allowable Business Investment Losses
			Farm Losses
		Lifetime Capital Gains Deduction
			Background
			Current And Future Limits
			Qualified Property
			Determining The Deductible Amount
			Comprehensive Example
		Ordering Of Deductions And Losses
			Significance Of Ordering
			Ordering In Computing Net Income For Tax Purposes
			Ordering In Computing Taxable Income
			Example
		Tax Payable Overview
			General
			Basic Federal Tax Payable
		Tax On Split Income (TOSI)
			A Note Of Caution
			Background
			Determining Applicability
			Excluded Amounts
			Calculation Of The Tax
		Tax Credits Revisited
			Transfer Of Dividends To A Spouse Or Common-Law Partner
			Charitable Donations Credit Revisited – Introduction
			Foreign Tax Credits Revisited
		Alternative Minimum Tax
			General Concept
			Minimum Tax Calculation
			Tax Credits For AMT
			AMT Carry Forward - ITA 120.2
		Sample Comprehensive Personal Tax Return
		Key Terms Used In This Chapter
		References
		Appendix - Returns For Deceased Taxpayers
			Special Rules At Death
			Representation
			Procedures For Specific Returns
			Filing Requirements
			Use Of Deductions And Credits
			Payment Of Taxes
		Sample Tax Return and Tax Software SS Problem
		Problems For Self Study (Online)
		Assignment Problems
		Tax Software Assignment Problems
	CHAPTER 12: Taxable Income And Tax Payable For Corporations
		Recent Developments In Corporate Taxation
			Small Business Deduction Rate
			Tax Planning By Private Corporations
		Computation Of Net Income
		Computation Of Taxable Income
			Deductions Available To Corporations
			Dividends From Other Corporations
			Non-Capital Loss Carry Over For A Corporation
			Ordering Of Taxable Income Deductions
		Geographical Allocation Of Income
			Permanent Establishments
			Activity At Permanent Establishments
			Example - Permanent Establishments
		Federal Tax Payable
			Basic Rate
			Federal Tax Abatement
			General Rate Reduction
		Provincial Tax Payable
			General Rules
			General Rate
			Manufacturing And Processing Rate
			Small Business Rate
			Investment Income Rates
			Other Provincial Taxes
		Other Goals Of The Corporate Tax System
		Small Business Deduction
			Introduction
			Canadian Controlled Private Corporation (CCPC)
			Active Business Income
			Annual Business Limit
			Allocation Among Associated Companies
			Calculating The Small Business Deduction
			Annual Business Limit Reduction
			Personal Services Corporations
			Professional Corporations And Management Companies
		Manufacturing And Processing Profits Deduction
			Introduction
			Calculating The Deduction
			Eligibility
			M&P Profits Defined
		General Rate Reduction - ITA 123.4(2)
			Approach To Rate Reductions
			Full Rate Taxable Income
			Application To Companies Other Than CCPCs
			Application To CCPCs
		Foreign Tax Credits For Corporations
			Introduction
			Calculation Of Foreign Tax Credits
		Refundable Journalism Labour Tax Credit
			Described
			Definitions - ITA 125.6
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 13: Taxation Of Corporate Investment Income
		Note On Current Developments
		Integration
			The Basic Concept
			Eligible Vs. Non-Eligible Dividends
			Rates Required For Integration
		Refundable Taxes On Investment Income
			Meaning Of Aggregate Investment Income
			Basic Concepts
		Refundable Part I Tax On Investment Income
			Additional Refundable Tax On Investment Income (ART)
			Problem One: Excessive Tax Rates On The Flow Through Of A CCPC’s Investment Income
			Solution To Problem One: Refundable Portion Of Part I Tax
		Refundable Part IV Tax On Dividends Received
			Problem Two: Use Of Multi-Level Affiliations To Defer Taxes On Investment Income
			Solution To Problem Two: Refundable Part IV Tax
			Part IV Tax On Portfolio Dividends Received
			Dividends From A Connected Corporation
			Dividends Paid Out Of Mixed Income Of A Connected Corporation
			Other Part IV Tax Considerations
		Designation Of Eligible Dividends
			Basic Concepts
			CCPCs And Their GRIP
			Non-CCPCs And Their LRIP
			Part III.1 Tax On Excessive Eligible Dividend Designations
			A Final Word On Eligible Dividends
		Refundable Dividend Tax On Hand (RDTOH)
			Background
			Transitional Provision
			Part IV Tax Payable
			Refundable Part I Tax Payable
			RDTOH Balances Defined
			The Dividend Refund
			Economic Impact Of Changes
			Example Of RDTOH Calculations
		Working Through Large Corporate Tax Problems
		Key Terms Used In This Chapter
		References
		Sample Corporate Tax Return For Chapter 13
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 14: Other Issues In Corporate Taxation
		Introduction
		Acquisition Of Control Rules
			Economic Background
			Acquisition Of Control Legislation
			Deemed Year End
			Restrictions On The Use Of Losses
			Unrecognized Losses At Deemed Year End
			Deemed Disposition Election
		Associated Companies
			The Problem
			Definitions
			Examples - Associated Corporation Rules
		Investment Tax Credits
			Background
			Procedures
			Eligible Expenditures
			Rates
			Refundable Investment Tax Credits
			Carry Overs Of Investment Tax Credits
			Effect Of Acquisition Of Control On Investment Tax Credits
		Tax Basis Shareholders’ Equity
			Shareholders’ Equity Under GAAP
			Paid Up Capital (Tax Basis Contributed Capital)
			Tax Basis Retained Earnings
			Capital Dividend Account (CDA)
		Distributions Of Corporate Surplus
			Introduction
			Regular Cash Dividends
			Stock Dividends
			Dividends In Kind
			Capital Dividends Under ITA 83(2)
			Deemed Dividends Under ITA 84(1) -Increase In PUC
			Deemed Dividends Under ITA 84(2) -On Winding-Up
			Deemed Dividends Under ITA 84(3) -On Redemption, Acquisition, Or  Cancellation Of Shares
			Deemed Dividends Under ITA 84(4) And ITA 84(4.1)
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
		Tax Software Assignment Problem
	CHAPTER 15: Corporate Taxation And Management Decisions
		The Decision To Incorporate
			Basic Tax Considerations
			Other Advantages And Disadvantages
		Tax Reduction And Deferral
			Approach
			Basic Example
			Public Corporation
			CCPC - Active Business Income
			CCPC - Investment Income Other Than Dividends
			CCPC - Dividend Income
			Conclusions On Tax Reductions And Deferrals
		Provincial Taxes And Integration
			Introduction
			Tax Deferral
			Tax Reduction
			Examples - Effects Of Provincial Rates On Integration
			Summary: Tax Deferral And Tax Reduction
		Tax Free Dividends
			Tax Rates On Dividends
			Use Of Tax Credits
			Tax Free Amounts For 2020
		Income Splitting
			Basic Concept
		Shareholder Benefits Including Loans
			The Owner-Manager Environment
			Shareholder Benefits Other Than Loans
			Shareholder Loans
		Management Compensation
			General Principles
			Salary Vs. Dividends
		Salary Vs. Dividends For The Owner-Manager
			The Basic Trade-Off
			Other Considerations
			Conclusion
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 16: Rollovers Under Section 85
		Rollovers Under Section 85
			Introduction
		General Rules For The Transfer
			Transferor And Transferee
			Eligible Property
			Consideration To Transferor
			Making The Election
			Selecting The Transfer Price
		Transfer Prices - Detailed Rules
			Rules Applicable To All Assets
			Accounts Receivable
			Inventories And Non-Depreciable Capital Property
			Non-Depreciable Capital Property -Disallowed Capital Losses
			Depreciable Property
			Depreciable Property – Disallowed Terminal Losses
			Summary Of Transfer Price Rules
		Allocation Of The Elected Value
			Consideration Received By The Transferor (Shareholder)
			Assets Acquired By The Corporation
		Paid Up Capital (PUC) Of Shares Issued
			General Rules
			Paid Up Capital Reduction
			More Than One Class Of Shares
		Comprehensive Example - Section 85 Rollovers
			Basic Information
			Excluded Assets
			Implementing The Election
		Gift To Related Party - Section 85
			General Rules
			Example
		Excess Consideration - Section 85
			Introduction
			Shareholder Benefit - ITA 15(1)
		Dividend Stripping — ITA 84.1
			Background
			Applicability Of ITA 84.1
			Dividend Stripping Example
		Capital Gains Stripping — ITA 55(2)
			The Problem
			Application Of ITA 55(2)
			Capital Gains Stripping - Example One
			Capital Gains Stripping - Example Two
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 17: Other Rollovers And Sale Of An Incorporated Business
		Introduction
		Share For Share Exchanges - ITA 85.1
			Background
			General Rules
			Conditions For The Application Of ITA 85.1
			Example
		Exchange Of Shares In A Reorganization - ITA 86
			Application Of ITA 86(1)
			Conditions For The Reorganization
			Procedures
			Example Using ITA 86(1) In An Estate Freeze
			Gift To Related Person - ITA 86(2)
			Using ITA 86(1) - Tax Planning Considerations
		Amalgamations - ITA 87
			The Nature Of An Amalgamation
			Position Of The Amalgamated Company
			Position Of The Shareholders
			Vertical Amalgamations
			Asset Bump-Ups
			Non-Tax Considerations
			Amalgamations - Tax Planning Considerations
		Winding-Up Of A 90 Percent Owned Subsidiary
			The Nature Of A Winding-Up
			Acquisition Of Assets
			Disposition Of Shares
			Tax Planning Considerations - Amalgamation Vs. Winding-Up
		Winding-Up Of A Canadian Corporation
			The Nature Of The Transaction
			Example
		Convertible Properties
			Application
			Other Considerations
		Sale Of An Incorporated Business
			Alternatives
			Restrictive Covenants (a.k.a. Non-Competition Agreements)
			Sale Of Individual Assets
			Sale Of Assets As A Going Concern
			Sale Of Shares
			Evaluation Of Alternatives
			Example
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 18: Partnerships
		Introduction
			Taxable Entities In Canada
			Chapter Coverage
		Partnerships Defined
			The Importance Of Defining A Partnership
			Basic Partnership Elements
			Types Of Partnerships
		Co-Ownership, Joint Ventures, And Syndicates
			Introduction
			Co-Ownership
			Joint Ventures
			Syndicates
		Partnership Income, Losses, And Tax Credits
			Introduction
			Applicable Concepts
			Calculating The Amounts To Be Allocated
			Methods Of Allocation
		The Partnership Interest
			The Concept
			Acquiring A Partnership Interest
			Adjusted Cost Base Of The Partnership Interest
			Disposition Of A Partnership Interest
		Limited Partnerships And Limited Partners
			Definitions
			At-Risk Rules
		Transfer Of Property To And From A Partnership
			Definition Of Canadian Partnership
			Transfers With No Rollover Provision
			Common Partnership Rollovers
		Specified Investment Flow Through Partnerships
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 19: Trusts And Estate Planning
		Introduction
		Basic Concepts
			What Is A Trust?
			Establishing A Trust
			Returns And Payments - Trusts
			Non-Tax Reasons For Using Trusts
		Classification Of Trusts
			Introduction
			Personal Trusts
			Testamentary Trusts
			Inter Vivos Trusts
		Taxation Of Trusts
			Taxation Year
			The Basic Taxation Model
			Rollovers To A Trust
			Rollovers To Capital Beneficiaries
			21 Year Deemed Disposition Rule
			Other Deemed Dispositions
		Net Income For Tax Purposes Of A Trust
			Basic Rules
			Preferred Beneficiary Election
			Amounts Deemed Not Paid
			Amounts Retained For A Beneficiary Under 21 Years Of Age
		Taxable Income Of A Trust
		Income Allocations To Beneficiaries
			General Rules
			Discretionary And Non-Discretionary Distributions
			Flow Through Provisions
			Principal Residence Exemption
		Tax Payable Of Personal Trusts
			Calculation Of Basic Amount
			Other Tax Payable Considerations
		Income Attribution - Trusts
			General Rules
			Attribution To Settlor (Reversionary Trust)
		Purchase Or Sale Of An Interest In A Trust
			Income Interest
			Capital Interest
		Tax Planning
			Family Trusts
			Qualifying Spousal Or Common-Law Partner Trusts
			Alter Ego Trusts
			Joint Spousal Or Joint Common-Law Partner Trusts
		Estate Planning
			Non-Tax Considerations
			Tax Considerations
		Estate Freeze
			Objectives Of An Estate Freeze
			Techniques Not Involving Rollovers
			Section 86 Share Exchange
			Rollover Provisions - Section 85 vs. Section 86
		SIFT Partnerships And Trusts
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 20: International Issues In Taxation
		Introduction
			Subjects Covered
			The Role of International Tax Treaties
		Part I Tax On Non-Residents
			Introduction
			Carrying on Business in Canada
			Canadian Source Employment Income
			Dispositions of Taxable Canadian Property
		Part XIII Tax On Non-Residents
			Introduction
			Interest Payments
			Dividend Payments
			Royalty Payments
			Rental Income
			Pension Payments And Other Retirement Related Benefits
			Shareholder Loans To Non-Residents
		Immigration And Emigration
			Entering Canada - Immigration
			Departures From Canada - Emigration
			Unwinding A Deemed Disposition
			Short-Term Residents
		Foreign Source Income Of Canadian Residents
			Introduction
			Foreign Investment Reporting Requirements
			Foreign Source Employment Income
			Foreign Source Business Income (Unincorporated Sources)
			Foreign Source Interest Income
			Foreign Source Capital Gains
			Foreign Source Dividend Income - Problems
			Foreign Source Dividends Received By Individuals
			Foreign Dividends Received From Non-Affiliated Corporations
			Dividends Received From Non-Controlled Foreign Affiliates
			Dividends Received From Controlled Foreign Affiliates
			Foreign Accrual Property Income (FAPI)
		Key Terms Used In This Chapter
		References
		Problems For Self Study (Online)
		Assignment Problems
	CHAPTER 21: GST/HST
		Introduction
			Background
			The Current Situation
			How This Text Deals With This Complexity
		Transaction Tax Concepts
			General Description
			Types Of Transaction Taxes
		Liability For GST/HST
			Basic Charging Provision
			The Concept Of Supply
		Supply Categories
			Taxable Supplies
			Exempt Supplies
		Applying The GST/HST Rate
			Place Of Supply
			Applying The Rate
		Collection And Remittance Of GST/HST
		Registration
			Meaning Of Person For GST/HST
			Who Must Register
			Exemption For Non-Residents
			Exemption For Small Suppliers
		Input Tax Credits
			Vendors Of Fully Taxable And Zero-Rated Supplies
			Vendors Of Exempt Supplies
			Accounting vsIncome Tax vs. GST/HST
			Example One - Fully Taxable And Zero-Rated Supplies
			Example Two - Fully Taxable And GST Exempt Supplies
		Relief For Small Businesses
			Quick Method Of Accounting
			Small Suppliers Exemption
			Simplified Input Tax Credit Method
		GST/HST Procedures And Administration
			GST/HST Returns And Payments
			Associated Persons
			Refunds And Rebates
			Books And Records
			Appeals
			General Anti-Avoidance Rule
		Employee And Partner GST/HST Rebate
			General Concept
			Calculating The GST/HST Rebate Amount
			Example
		Residential Property And New Housing Rebate
			General Rules For Residential Property
			New Housing Rebate
		Sale Of A Business
			Sale Of Assets
			Sale Of Shares
			Other Situations
		Specific Applications
		Partnerships And GST/HST
			General Rules
			Partner Expenses
			Disposition Of A Partnership Interest
			Transfers Between Partners And Partnerships
			Reorganization Of The Partnership
		Trusts And GST/HST
		Key Terms Used In This Chapter
		Problems For Self Study (Online)
		Assignment Problems
	Index
Byrd & Chen’s Canadian Tax Principles 2020–2021 Edition (Study Guide)
	Copyright
	Contents
	Preface
	CHAPTER 1
		Chapter 1 Learning Objectives
		How to Work Through Chapter 1
		Solutions to Chapter 1 Exercises
	CHAPTER 2
		Chapter 2 Learning Objectives
		How to Work Through Chapter 2
		Solutions to Chapter 2 Exercises
	CHAPTER 3
		Chapter 3 Learning Objectives
		How to Work Through Chapter 3
		Solutions to Chapter 3 Exercises
	CHAPTER 4
		Chapter 4 Learning Objectives
		How to Work Through Chapter 4
		Sample Personal Tax Return For Chapter 4
		Suggestions For Working With ProFile Software
		Tax Software Self Study Problem - Chapter 4
		Solutions to Chapter 4 Exercises
		Solution to Tax Software Self Study Problem - Chapter 4
	CHAPTER 5
		Chapter 5 Learning Objectives
		How to Work Through Chapter 5
		Solutions to Chapter 5 Exercises
	CHAPTER 6
		Chapter 6 Learning Objectives
		How to Work Through Chapter 6
		Solutions to Chapter 6 Exercises
	CHAPTER 7
		Chapter 7 Learning Objectives
		How to Work Through Chapter 7
		Solutions to Chapter 7 Exercises
	CHAPTER 8
		Chapter 8 Learning Objectives
		How to Work Through Chapter 8
		Solutions to Chapter 8 Exercises
	CHAPTER 9
		Chapter 9 Learning Objectives
		How to Work Through Chapter 9
		Solutions to Chapter 9 Exercises
	CHAPTER 10
		Chapter 10 Learning Objectives
		How to Work Through Chapter 10
		Solutions to Chapter 10 Exercises
	CHAPTER 11
		Chapter 11 Learning Objectives
		How to Work Through Chapter 11
		Sample Personal Tax Return For Chapter 11
		Tax Software Self Study Problem - Chapter 11
		Solutions to Chapter 11 Exercises
		Solution to Tax Software Self Study Problem - Chapter 11
	CHAPTER 12
		Chapter 12 Learning Objectives
		How to Work Through Chapter 12
		Solutions to Chapter 12 Exercises
	CHAPTER 13
		Chapter 13 Learning Objectives
		How to Work Through Chapter 13
		Sample Corporate Tax Return
		Solutions to Chapter 13 Exercises
	CHAPTER 14
		Chapter 14 Learning Objectives
		How to Work Through Chapter 14
		Solutions to Chapter 14 Exercises
	CHAPTER 15
		Chapter 15 Learning Objectives
		How to Work Through Chapter 15
		Solutions to Chapter Fifteen Exercises
	CHAPTER 16
		Chapter 16 Learning Objectives
		How to Work Through Chapter 16
		Solutions to Chapter 16 Exercises
	CHAPTER 17
		Chapter 17 Learning Objectives
		How to Work Through Chapter 17
		Solutions to Chapter 17 Exercises
	CHAPTER 18
		Chapter 18 Learning Objectives
		How to Work Through Chapter 18
		Solutions to Chapter 18 Exercises
	CHAPTER 19
		Chapter 19 Learning Objectives
		How to Work Through Chapter 19
		Solutions to Chapter Nineteen Exercises
	CHAPTER 20
		Chapter 20 Learning Objectives
		How to Work Through Chapter 20
		Solutions to Chapter 20 Exercises
	CHAPTER 21
		Chapter 21 Learning Objectives
		How to Work Through Chapter 21
		Solutions to Chapter 21 Exercises
	Glossary