Nancy Swan

TX2 Advanced Personal and Corporate Taxation

Assignment 2 Hints 2011
1) 18 marks
A) See paragraphs 84.1(1)(b) and 84.1(2)(a.1).B) See subsection 89(1)
B) See paragraph 212.1(1)(a)
D) See subsection 86(2)
E) This is a share exchange: subsection 85.1(1) applies, paragraph for NSC?
F) See subsections 84(3), 55(2)
I) See subsection 87(4), especially paragraph (?).
2) 16 marks
Part a) The content, presentation, and style of the letter may vary from one
individual to another. However, you should include a description of the requests
made by CRA, details of the transactions, comments on the tax consequences of
the transactions.
3 marks are allocated for presentation (letter format), spelling, grammar, and
professionalism in written
communication (clarity, logical order).
3) 16 marks
Part a)
Deemed dividend [84.1(1)(b)]
(A + D) (E + F) F=$550,000
Subsection 85(2.1)
(A - B) x C / A
Where
A = increase in the PUC of all the shares of the capital stock of the corporation
B = agreed amount in excess of the FMV of the non-share consideration
C = increase in the PUC of the particular class of shares received in
consideration of the rollover = $550,000
Part b)
the provisions of subsection 84.1(1), the
non-share consideration cannot exceed the greater of the ACB or the PUC of the
shares
5) 23 marks
CDA = $184,500