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- Title
THE APPLICATION OF SECTION 84.1-TIPS AND TRAPS.
- Authors
Kraft, James; Kraft, Deborah
- Abstract
Section 84.1 of the Income Tax Act is designed to prevent the removal of corporate surplus on a tax-free basis. This article examines the conditions that will cause a transaction to fall within the scope of section 84.1, explores the adjustments that result, and discusses the application of the provision in a variety of situations. A number of deeming rules are embedded in the provision in order to accomplish its objective; however, these rules can be problematic. While section 84.1 may present a trap for the unwary, awareness and planning can curtail the negative implications.
- Subjects
CANADA; CANADA. Income Tax Act; CORPORATE taxes; STOCKS (Finance); TRUSTS &; trustees; STOCKHOLDER attitudes
- Publication
Canadian Tax Journal / Revue Fiscale Canadienne, 2012, Vol 60, Issue 2, p449
- ISSN
0008-5111
- Publication type
Article