MGAD65H3 Lecture Notes - Lecture 11: Qualified Dividend, Capital Loss, Property Income
14 Oct 2017
School
Department
Course
Professor
Document Summary
Acquisition of control of a corporation and the effect on losses. Purpose: to (cid:272)ur(cid:271) (cid:862)tax-loss tradi(cid:374)g(cid:863) tra(cid:374)sa(cid:272)tio(cid:374)s the loss co is attractive, by acquiring the loss co, the profitable co could shelter their income from tax by utilizing the losses of the acquired co. When: control has been acquired by a person or group of persons based on voting rights (>50%) Deemed year-end (the day before the control change) Need to file a tax return within 6 months from deemed y/e for this stubperiod. The short-taxation year counts as one year for non-capital loss aging, unpaid amounts, Cca and cec are prorated if the deemed y/e has less than 365 days. Need to choose a new y/e cannot exceed 53 weeks. The effect is 2 taxation years in the same calendar year. Recalculate the business income by evaluating each asset. Since the yr has been deemed as the y/e, certain adj must be made: inventory:
