CONTENTS CHAPTER 1. CHAPTER 1, continued CHAPTER 2. Introduction To Federal Taxation In Canada. Income Or Loss From An Office Or Employment.

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1 xvii CONTENTS 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.. 8 Income Tax Reference Materials Introduction The Income Tax Act Other Income Tax Legislation Other Sources Of Income Tax Information. 15 Liability For Income Tax Charging Provision For Canadian Residents. 17 Charging Provision For Non-Residents 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 Loss Carry Overs Net Income For Tax Purposes - Example.. 24 Net Income To Taxable Income CHAPTER 1, continued Principles Of Tax Planning Tax Avoidance Or Reduction Tax Deferral Income Splitting Abbreviations To Be Used Key Terms Used In This Chapter References Problems For Self Study Assignment Problems CHAPTER 2 Income Or Loss From An Office Or Employment Employment Income Defined General Rules Cash Basis And Use Of Bonus Arrangements. 36 Net Concept Employee Versus Self-Employed Introduction Employee Perspective Employer Perspective Making The Distinction Inclusions - Salaries And Wages Inclusions - Fringe Benefits ITA 6(1) - Amounts To Be Included In Income 41 CRA Administrative Practice On Fringe Benefits (IT-470R) Tuition Fees Gifts

2 xviii Table Of Contents CHAPTER 2, continued Inclusions - Fringe Benefits Non-Taxable Benefits (IT-470R) Other ITA 6 Inclusions Tax Planning Considerations Inclusions - GST On Taxable Benefits Inclusions - Board And Lodging Inclusions - Automobile Benefits Employees And Automobiles Standby Charge Operating Cost Benefit Payments By Employee For Automobile Use. 51 Example - Employer Owned Automobile.. 52 Example - Employer Leased Vehicle Employer Provided Cars And Tax Planning. 53 Inclusions - Allowances Allowance Vs. Reimbursement General Rules Taxable Vs. Non-Taxable Allowances Reasonable Allowances For Motor Vehicles. 56 Employer s Perspective Of Allowances Employee s Perspective Of Allowances Inclusions - Employee Insurance Benefits. 58 Life Insurance Disability Insurance) Health Care Insurance Loans To Employees General Rules Home Relocation Loans Tax Planning For Interest Free Loans Inclusions - Stock Option Benefits The Economics Of Stock Option Arrangements 62 Overview Of The Tax Rules Private Vs. Public Companies General Rules For Public Companies General Rules For Canadian Controlled Private Corporations Deferral On Publicly Traded Shares Other Inclusions Payments By Employer To Employee Forgiveness Of Employee Loans Housing Loss Reimbursement Discounts On Employer s Merchandise Club Dues And Recreational Facilities CHAPTER 2, continued Specific Deductions Salesperson s Expenses Travel Expenses And Motor Vehicle Costs.. 75 The Salesperson's Dilemma Other Expenses Of Performing Duties Automobile And Aircraft Expenses Home Office Costs For Employees Key Terms Used In This Chapter References Problems For Self Study Assignment Problems CHAPTER 3 Taxable Income And Tax Payable For Individuals Introduction Taxable Income Of Individuals Ordering Of Deductions Deductions For Payments Home Relocation Loan Northern Residents Deductions 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. 98 Calculating Tax Credits Federal Amounts Provincial Amounts Personal Tax Credits - ITA 118(1) Individuals With A Spouse Or Common-Law Partner Individuals Supporting An Eligible Dependant 101 Child Tax Credit Single Persons Caregiver Tax Credit) Infirm Dependant Over 17 Tax Credit Interaction: Eligible Dependant Vs. Caregiver Or Infirm Dependant Over Caregiver Vs. Infirm Dependant Over

3 Table Of Contents xix CHAPTER 3, continued Other Tax Credits For Individuals Age Tax Credit Pension Income Tax Credit Canada Employment Tax Credit Adoption Expenses Credit Public Transit Pass Credit Child Fitness Credit Charitable Donations Credit Medical Expense Credit Disability Credit Education Related Credits Employment Insurance (EI) And Canada Pension Plan (CPP) Credits Overpayment Of EI Premiums And CPP Contributions Transfers To A Spouse Or Common-Law Partner Working Income Tax Benefit Political Contributions Tax Credits Labour Sponsored Funds Tax Credit Dividend Tax Credit Foreign Tax Credits Investment Tax Credits Refundable Credits Introduction Refundable GST Credit Canada Child Tax Benefit Social Benefits Repayment (OAS And EI). 124 Basic Concepts Employment Insurance (EI) Benefits Clawback 125 Old Age Security (OAS) Benefits Clawback. 125 Comprehensive Example Key Terms Used In This Chapter References Problems For Self Study Assignment Problems Tax Software Assignment Problems CHAPTER 4 Capital Cost Allowances And Cumulative Eligible Capital Capital Cost Allowance System General Rules Tax And Accounting Procedures Compared. 145 Additions To Capital Cost Determination Of Amounts Available For Use Rules Segregation Into Classes Capital Cost Allowances General Overview Commonly Used CCA Classes Half-Year Rules (a.k.a. First Year Rules) Short Fiscal Periods Tax Planning Considerations Dispositions Of Depreciable Assets General Rules Capital Gains Recapture Of Capital Cost Allowance Terminal Losses CCA Schedule CCA Determination - Special Situations. 161 Separate Class Election Other Special Situations Cumulative Eligible Capital (CEC) Eligible Capital Expenditures Defined Terminology Additions, Amortization, And Dispositions. 163 Special Situations Key Terms Used In This Chapter References Appendix - CCA Rates For Selected Assets 169 Problems For Self Study Assignment Problems

4 xx Table Of Contents CHAPTER 5 Income Or Loss From A Business Defining Business Income Business Income Vs. Capital Gains Capital Assets Defined Criteria For Identifying Capital Gains Business Income And GAAP Business Income - Inclusions (Revenues) 183 Amounts Received And Receivable Reserves Other Inclusions Limitations On Deductions From Business And Property Income Specific Limiting Items Under ITA Foreign Media Advertising Provincial Capital And Payroll Taxes Limitations On Deductions From Business, Property, And Employment Income Reasonableness Meals And Entertainment Costs Of Automobile Ownership And Leasing 196 Automobile Leasing Costs Fines, Penalties, and Illegal Payments Leasing Property Business Income - Specific Deductions. 200 Reconciliation Schedule Business Income - Example Taxation Year General Rules Unincorporated Businesses - Non-Calendar Fiscal Year Special Business Income Situations Income For Farmers Income For Professionals Ceasing To Carry On A Business Scientific Research And Development Key Terms Used In This Chapter References Problems For Self Study Assignment Problems Tax Software Assignment Problem CHAPTER 6 Income From Property Introduction Property Income: General Concept Interest As A Deduction The Problem The Government Response IT Interest Deductibility And Related Issues Discount And Premium On Issued Debt Interest Income General Provision Corporations And Partnerships Individuals Discount And Premium On Debt Holdings. 242 Prescribed Debt Obligations Indexed Debt Obligations 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 Eligible Vs. Non-Eligible Dividends Gross Up And Tax Credit Procedures - Non-Eligible Dividends Gross Up And Tax Credit Procedures - Eligible Dividends Comparison Of Investment Returns Income Trusts How Do Trusts Work? Tax Consequences Of New Uses For Trusts. 256 Basis For Popularity October 31, 2006 Changes Taxation Of Trusts: Pre-2011 Rules Mutual Funds Objective Organization Distributions Adjusted Cost Base

5 Table Of Contents xxi CHAPTER 6, continued CHAPTER 7, continued Other Types Of Dividends Stock Dividends Capital Dividends Foreign Source Income General Rules Foreign Non-Business (Property) Income. 263 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 Assignment Problems Tax Software Assignment Problem CHAPTER 7 Capital Gains And Capital Losses Economic Background Capital Assets And Income Taxation Policy. 277 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 Non-Arm s Length Transfers Of Property 289 Introduction Inadequate Considerations - ITA Inter Vivos Transfers To A Spouse Farm Or Fishing Property To A Child Non-Arm s Length Transfers Of Depreciable Assets Deferral Provisions On Replacement Property The Problem Voluntary And Involuntary Dispositions Timing Considerations Application Of ITA 44(1) To Capital Gains. 298 Application Of ITA 13(4) To Recapture Combined Application Of ITA 13(4) And 44(1) 300 Class 1 CCA Budget Proposals Deferral Provisions On Small Business Investments Basic Provision Example Deemed Dispositions Introduction Change In Use Departures From Canada Death Of A Taxpayer Provisions For Special Assets Principal Residence Personal Use Property Listed Personal Property Gains And Losses On Foreign Currency Options Capital Gains And Tax Planning Key Terms Used In This Chapter References Problems For Self Study Assignment Problems Tax Software Assignment Problem

6 xxii Table Of Contents CHAPTER 8 Other Income, Other Deductions, and Income Attribution Introduction Other Income - Subdivision d Inclusions. 341 Pension Benefits Retiring Allowances Death Benefits Income Inclusions From Deferred Income Plans Scholarships And Prizes Research Grants Social Assistance And Workers Compensation Payments Universal Child Care Benefit Other Deductions - Subdivision e CPP Contributions On Self-Employed Earnings 343 Moving Expenses Child Care Expenses Disability Supports Deduction Related Inclusions And Deductions Introduction Employment Insurance Benefits Pension Income Splitting Spousal And Child Support Annuity Payments Received Registered Savings Plans Registered Education Savings Plans (RESPs). 357 Registered Disability Savings Plans (RDSPs). 363 Tax Free Savings Accounts (TFSAs) Income Attribution The Problem Basic Rules - ITA 74.1(1) And (2) Income Attribution - Other Related Parties. 369 Anti-Avoidance Provisions Tax Planning Key Terms Used In This Chapter References Problems For Self Study Assignment Problems Tax Software Assignment Problem CHAPTER 9 Retirement Savings And Other Special Income Arrangements Planning For Retirement Introduction Providing Consistency Tax Deferred Savings Defined Benefit Vs. Money Purchase Plans. 390 Registered Retirement Savings Plans (RRSPs) Basic Operations RRSP Deduction Limit Examples Of RRSP Deduction Calculations. 399 Undeducted RRSP Contributions RRSP And RRIF Administration Fees RRSP Withdrawals And Voluntary Conversions 403 Involuntary Termination Due To Age Limitation Spousal RRSP Home Buyers Plan (HBP) Lifelong Learning Plan (LLP) Departure From Canada Death Of The Registrant Registered Pension Plans (RPPs) Establishing An RPP Employer Contributions To The RPP Employee Contributions To The RPP Options At Retirement Phased Retirement Registered Retirement Income Funds (RRIFs) Establishment Minimum Withdrawals Death Of The Registrant Evaluation Of RRIFs Deferred Profit Sharing Plans General Rules Tax Planning Profit Sharing Plans Transfers Between Plans Accumulated Benefits Retiring Allowances

7 Table Of Contents xxiii CHAPTER 9, continued Retirement Compensation Arrangements 419 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 Assignment Problems Tax Software Assignment Problem CHAPTER 10 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 Qualified Property Determining The Deductible Amount Comprehensive Example CHAPTER 10, continued 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 Basic Federal Tax Payable Tax On Split Income Tax Credits Revisited Transfer Of Dividends To A Spouse Or Common-Law Partner Charitable Donations Credit Revisited Foreign Tax Credits Revisited Alternative Minimum Tax General Concept Minimum Tax Calculation Tax Credits For AMT AMT Carry Forward Short Summary Of Filing Procedures Key Terms Used In This Chapter References Problems For Self Study Assignment Problems Tax Software Assignment Problems CHAPTER 11 Taxable Income And Tax Payable For 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 503 Ordering Of Taxable Income Deductions. 505

8 xxiv Table Of Contents CHAPTER 11, continued 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 Other Goals Of The Corporate Tax System 510 Small Business Deduction Introduction Canadian Controlled Private Corporation (CCPC) Active Business Income Annual Business Limit Allocation Among Associated Companies. 514 Calculating The Small Business Deduction. 514 Elimination Of Small Business Deduction For Large CCPCs Personal Services Corporations Professional Corporations And Management Companies Manufacturing And Processing Profits Deduction 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 523 Application To CCPCs Foreign Tax Credits For Corporations Calculation Of Foreign Tax Credits Key Terms Used In This Chapter References Problems For Self Study Assignment Problems CHAPTER 12 Taxation Of Corporate Investment Income Integration The Basic Concept Dividend Gross Up And Tax Credit Procedures 542 Integration And Business Income Refundable Taxes On Investment Income 546 Meaning Of Aggregate Investment Income. 546 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 556 Dividends From A Connected Corporation. 558 Dividends Paid Out Of Mixed Income Of A Connected Corporation Refundable Dividend Tax On Hand (RDTOH) RDTOH - General Definition Refundable Portion Of Part I Tax Payable. 561 The Dividend Refund Example Designation Of Eligible Dividends CCPCs And Their GRIP Non-CCPCs And Their LRIP Part III.1 Tax On Excessive Eligible Dividend Designations A Final Word On Eligible Dividends Key Terms Used In This Chapter References Problems For Self Study Assignment Problems

9 Table Of Contents xxv CHAPTER 13 Other Issues In Corporate Taxation Introduction Acquisition Of Control Rules Economic Background Acquisition Of Control Legislation Deemed Year End Restrictions On The Use Of Charitable Donations Restrictions On The Use Of Losses Unrecognized Losses At Deemed Year End. 588 Deemed Disposition Election Associated Companies The Problem Investment Tax Credits Procedures Eligible Expenditures Rates Refundable Investment Tax Credits Carry Overs Of Investment Tax Credits Acquisition Of Control Tax Basis Shareholders Equity Shareholders Equity Under GAAP Paid Up Capital Tax Basis Retained Earnings Pre-1972 Capital Surplus On Hand (CSOH) 602 Capital Dividend Account Distributions Of Corporate Surplus Regular Cash Dividends Stock Dividends Dividends In Kind Capital Dividends Under ITA 83(2) Deemed Dividends Under: ITA 84(1) - Increase In PUC ITA 84(2) - On Winding-Up ITA 84(3) - On Redemption, Acquisition, Or Cancellation Of Shares ITA 84(4) And ITA 84(4.1) Key Terms Used In This Chapter References Problems For Self Study Assignment Problems Tax Software Assignment Problem CHAPTER 14 Procedures And Administration Introduction Administration Of The Department Source Deductions Withholdings Employer s Remittance Of Source Deductions 625 Returns And Payments - Individuals Requirement To File Due Date For Individual Returns Instalment Payments For Individuals Interest Penalties Due Date For Balance Owing - Individuals. 633 Final Returns For Deceased Taxpayers Returns And Payments - Corporations Due Date For Corporate Returns Instalment Payments For Corporations Due Date For Balance Owing - Corporations 636 Interest And Penalties For Corporations Returns And Payments - Trusts Income Tax Information Returns Refunds Books And Records Assessments Initial Assessments Reassessments Adjustments To Income Tax Returns Appeals Consent Form Informal Request For Adjustments Notice Of Objection Tax Court Of Canada Federal Court And Supreme Court Of Canada 643 Tax Evasion, Avoidance And Planning Tax Evasion Avoidance And Planning General Anti-Avoidance Rule (GAAR) Reasonable Expectation Of Profit (REOP). 646

10 xxvi Table Of Contents CHAPTER 14, continued CHAPTER 15, continued Collection And Enforcement Taxpayer Property Collections Other Penalties Taxpayer Relief Provisions (Fairness Package) Basic Rules Application Key Terms Used In This Chapter References Problems For Self Study Assignment Problems 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 669 Provincial Taxes And Integration Introduction Tax Deferral Tax Reduction Tax Free Dividends Tax Rates On Dividends Use Of Tax Credits Tax Free Amounts For Income Splitting Basic Concept Example Shareholder Benefits 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 Assignment Problems CHAPTER 16 Rollovers Under Section 85 Rollovers Under Section Introduction General Rules For The Transfer Transferor And Transferee Eligible Property Consideration To Transferor Making The Election Establishing The Transfer Price

11 Table Of Contents xxvii CHAPTER 16, continued 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 - Terminal Losses Disallowed Eligible Capital Property Eligible Capital Property - Disallowed Deductions Allocation Of The Elected Value Consideration Received By The Transferor (Shareholder) Assets Acquired By The Corporation Paid Up Capital Of Shares Issued General Rules Paid Up Capital Reduction More Than One Class Of Shares Section 85 Rollovers Comprehensive Example Excluded Assets Implementing The Election Gift To Related Person - Section Example Section 85 - Excess Consideration ITA 15(1) Shareholder Benefit ITA 84(1) Deemed Dividend Dividend Stripping ITA Background Applicability Of ITA Example - Post-1971 Shares 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 Assignment Problems CHAPTER 17 Other Rollovers And Sale Of An Incorporated Business Introduction Share For Share Exchanges Example Exchange Of Shares In A Reorganization. 751 Application Of Section Conditions For The Reorganization Procedures Example Using ITA 86 In An Estate Freeze. 753 Gift To Related Person (Benefit Rule) Practical Considerations Using Section 86 - Advantages and Disadvantages Amalgamations Position Of The Amalgamated Company Position Of The Shareholders Vertical Amalgamations Non-Tax Considerations Tax Planning Considerations Winding-Up Of A 90% Owned Subsidiary 763 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. 768 Convertible Properties Application 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 Assignment Problems

12 xxviii Table Of Contents CHAPTER 18 Partnerships Introduction Taxable Entities In Canada Partnerships Defined The Importance Of Defining A Partnership. 794 Basic Partnership Elements Types Of Partnerships Co-Ownership, Joint Ventures And Syndicates Introduction Co-Ownership Joint Ventures Syndicates Partnership Income, Losses, Tax Credits 798 Introduction Basic Concepts Calculating Partnership Income Or Loss Allocations To Partners And Partner Expenses Method Of Allocation Allocation Of Specific Items The Partnership Interest The Concept Acquiring A Partnership Interest Adjustments To The ACB Of A Partnership Interest Limited Partnerships And Limited Partners 809 Definitions At-Risk Rules Transfer Of Property To And From A Partnership Introduction Transfers With No Rollover Provision Common Partnership Rollovers Specified Investment Flow Through (SIFT) Partnerships Key Terms Used In This Chapter References Problems For Self Study Assignment Problems CHAPTER 19 Trusts And Estate Planning Introduction Basic Concepts What Is A Personal Trust? Establishing A Trust Non-Tax Reasons For Using Trusts Classification Of Trusts Introduction Personal Trusts Testamentary Vs. Inter Vivos Trusts Taxation Of Trusts The Basic Model Rollovers To A Trust Rollovers To Capital Beneficiaries Year Deemed Disposition Rule Net Income For Tax Purposes Of A Trust 840 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 General Approach Taxation Of Testamentary Trusts Taxation Of Inter Vivos Trusts Other Tax Payable Considerations Trust Tax And Information Returns Income Attribution General Rules Attribution To Settlor (Reversionary Trust). 849 Purchase Or Sale Of An Interest In A Trust 849 Income Interest Capital Interest

13 Table Of Contents xxix CHAPTER 19, continued CHAPTER 20, continued Tax Planning Family Trusts Spousal Or Common-Law Partner Trusts Alter Ego Trusts Joint Spousal Or Common-Law Partner Trusts 853 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 SIFT Partnerships And Trusts The Problem The Solution: Specified Investment Flow-Through Entities A Word Of Caution Key Terms Used In This Chapter References Problems For Self Study Assignment Problems CHAPTER 20 International Issues In Taxation Introduction Subjects Covered The Role of International Tax Treaties Residence Importance Residence Of Individuals Residence Of Corporations Residence Of Trusts Non-Residents Earning Canadian Source Income Basic Approaches - Part I Or Part XIII Tax. 878 Canadian Source Employment Income Carrying on Business in Canada Dispositions of Taxable Canadian Property. 882 Canadian Source Property Income The Problem Of Double Taxation Sources Of The Problem Dual Residence Dual Source Residence Vs. Citizenship Residence Vs. Source Immigration And Emigration Entering Canada - Immigration Departures From Canada - Emigration Unwinding A Deemed Disposition Short-Term Residents Emigration And Stock Options Foreign Source Employment Income Foreign Source Business Income Foreign Source Capital Gains Foreign Source Investment Income Basic Concepts Foreign Investment Reporting Requirements 898 Non-Resident Entities Foreign Affiliates Controlled Foreign Affiliates Foreign Accrual Property Income (FAPI) Foreign Affiliate Dividends Foreign Investment Entities Dividends From Foreign Non-Affiliated Companies Transfer Pricing Key Terms Used In This Chapter References Problems For Self Study Assignment Problems

14 xxx Table Of Contents CHAPTER 21 Goods And Services Tax Note On 2007 Economic Statement Transaction Tax Concepts Liability For GST The Concept Of Supply Basic Definition Supply Categories Applying the GST Rate Effect Of Trade-Ins Collection And Remittance Of GST Registration Meaning Of Person For GST 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 vs. Income Tax vs. GST Example Relief For Small Businesses Quick Method Of Accounting Small Suppliers Exemption Simplified Input Tax Credit Method GST Procedures And Administration GST Returns And Payments Associated Persons Refunds And Rebates Books And Records Appeals General Anti-Avoidance Rule Employee And Partner GST Rebate Calculating The GST Rebate Amount Example Residential Property And New Housing Rebate Sale Of A Business Sale Of Assets Sale Of Shares CHAPTER 21, continued Specific Applications Harmonized Sales Tax (HST) Partnerships And GST General Rules Partner Expenses Disposition Of A Partnership Interest Transfers Between Partners And Partnerships 951 Reorganization Of The Partnership Trusts And GST Key Terms Used In This Chapter Problems For Self Study Assignment Problems INDEX GLOSSARY The Glossary can be found at the back of the separate paper Study Guide and on the Student CD-ROM within the FITAC version of Canadian Tax Principles. Supplementary Readings The Supplementary Readings can be found on the Student CD-ROM. No. 1 - Application Of The Median Rule No. 2 - Revoked Stock Option Election No. 3 - Stock Option Shares Deemed Not Identical Property No. 4 - Election For Pre-1982 Residences No. 5 - Determining M&P Profits No. 6 - SR & ED Expenditures No. 7 - Final Returns For Deceased Taxpayers No. 8 - Business Valuations No. 9 - Tax Shelters No Transfer Pricing