retrieved from
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2，童心一一无论你有多大，你的心不能变老
3，善良一一如果没有善良，其它的一切美好品质都会黯然失色。
4，浪漫一一偶尔浪漫一下，那种感觉就像一只小鸟在空中飞翔
5，优雅一一在生活中保持适当的优雅总是好的；当然，如果可以一直优雅，那就最好不过。
6，沉思一一在你有一肚子火要发之前，先给自己十分钟沉思一会
7，智慧一一你可以没有高深的学历，但万万不能没有智慧，起码也要有女人的自尊与自爱
8，纯洁一一洁者自清。现代社会已经够浑浊了，但你完全可以把握纯洁，相信我这是真的
9，勇敢一一做个勇敢的精灵，敢于追求心中的理想，不惧狂风会撕碎你的翅膀
10，可爱一一人不是因为美丽而可爱，而是因为可爱而美丽
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我是没有在北美读过书的，先是用中国的学历考了美国CPA，然后用美国CPA转CA，由于是先移民才考的美国CPA，所以需要补Business Law，从CKE开始，否则可以直接考一种加美互认考试，据说很这种考试简单很多。。
1. SOA的案例。。虽然没有一个人说学了有助于考试，都抱怨浪费时间，但自己感觉非常有用，因为涉及各行各业和各种需要用到CA的情况，可以加强对ＵＦＥ题目背景的了解，理解答题思路。特别是什么棒球俱乐部什么的类型，如果没有看ＳＯＡ，哪能会知道还有什么主场比赛和客场比赛收入差别，俱乐部分成。。队员抽签。。。今年的ＵＦＥ中至少两题是和今年的ＳＯＡ学习案例有些相似。。当时也没好好看ＳＯＡ案例，只是依稀记得。。考试时后悔呀。。但至少是面熟的，所以节省了去琢磨背景知识的时间。。同时，SOA案例覆盖了主要的考点。。特别是本年IFRS。。SOA案例和UFE的考点基本重合。。
２。放弃计算出最精确答案的冲动。。我是非常容易沉迷于计算出唯一准确答案的。。浪费时间不加分，毫无意义。。其实只要有点象就好了。这是看07 08 年考生答案的体会。。比如起个房子，搭了架子，有盖个结实的房子的可能就行，至于雕梁画栋，对通过没有帮助。。反而浪费搭架子的时间。。
3. 套话套话。。就像准备Tofel的八股文。。一个以前考过的朋友经验。。她连following or as follows都比较过那个打字更顺手。。我是从标准答案里整理一些利落的句子。。在思考问题的时候顺手打上。达到以不变应万变的效果。。
4。 不言放弃。。。在整个过程中，我真的很郁闷。比如在UFE的模拟考中，阅卷人善意提醒我字打慢些，competent 的CA需要正确的语法和拼写。她哪知我是根本就不懂什么是正确的语法，拼写更是需要电脑帮助。何况我本来就字打的慢，一般的小案例我最多写三页，大的能写到9页10页就不错了。。但几位朋友的经验告诉我，坚持就是胜利。。其中一位说当年考了第一天，就不想继续了，她老公说，当实地练习嘛。。就这样过了。。
回头看，这里的考试再难，在知识点考察方面比不上中国的考试难。。考试通过比例就说明问题。。相信自己。。语法不好，拼写不好，但也总有小部分人会犯比语法和拼写更多的错误。。
当然。。职业发展重要的还是语言沟通。。考试本身只是第一步。。
祝大家周末愉快！
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Filed under: CA2B | Leave a comment »
The Paid-Up Capital (PUC) of a class of shares = legal stated capital (LSC) of that class subject to adjustments under the Income Tax Act [S. 89(1)]. The calculation of the PUC of a share is made by reference to the PUC of a class of shares. Specifically, the PUC of a share is the paid-up capital for the class to which the share belongs divided by the number of shares in that class. The PUC of all the shares in the corporation is the sum of the total of the PUC of all the classes of shares. A corporation is allowed to have more than one class of shares under corporate law [S. 24(4) CBCA]. A ‘class’ of shares refers to a classification of shares that have different rights attached to them as provided for in the articles of incorporation. Corporate statutes presume all shares to be equal in the rights they confer upon shareholders [S. 24(3) CBCA]. Differentiation of rights of classes, conditions, privileges or restrictions are framed in the Articles of Incorporation. Some classes may have the right to vote; · the right to receive dividends; and the right to the remaining property upon dissolution of the corporation [S. 24(3) CBCA], or any combination thereof. For instance, Class A Common Shares may allow the right to vote and dividends with dissolution or wind-up rights, Class B Common Shares may only have the right to receive dividends in amounts different from lass A. Class C may simply have the right to property on dissolution.
The legal stated capital (LSC) of a class of shares is simply the values as stated on the financial statement balance sheet. For example if a corporation issues 5 Class A shares for $50 each, and these were the first shares issued by the corporation for that class, the stated capital for Class A shares would be $250.Stated capital is a legal concept whose interpretation will depend on the applicable corporate legislation. Under S. 26(1) of the federal Canada Business Corporations Act (CBCA). A corporation incorporated under that Act must maintain a separate stated capital account for each class and series of shares it issues. A corporation can reduce its stated capital only in compliance with the corporate legislation [S. 26(10)],which is rarely done except under extreme circumstances such as bankruptcy. However, PUC can change often throughout the life of a corporation even though the stated capital of the shares remains unchanged.
A common example to changes in PUC are so-called “rollovers” of property into a corporation by shareholders at the cost of the asset instead of the asset’s current fair market value, under section 85, to avoid the owner/shareholder having to pay capital gains on assets such as land. This can occur in situations when the corporation issues shares, according to [S. 26(3) CBCA].
:(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of, or another interest in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who, immediately before the exchange, dealt with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the corporation and all the holders of shares in the class or series of shares so issued consent to the exchange; or
(b) pursuant to an agreement referred to in subsection 182(1) or an arrangement referred to in paragraph 192(1)(b) or (c) or to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the
amalgamated body corporate.
(Also see IT-463R2 for a more technical definition of Paid-up Capital and IT-489R for non-arms length sale of shares to a
corporation.)
WHY DO WE CARE ABOUT PUC?
– In the case of private corporations, a payment in respect of reduction of PUC is received tax free.
– PUC is received as proceeds on a redemption of shares(S. 84(3)) or a winding up of a company (S.84(2)).
– If an increase in the FMV of net assets is less than the increase in PUC, the shareholder will receive a deemed dividend under Section
84(1)).
Basically, the PUC value of shares is returnable to shareholders tax free because, essentially, that is the value of assets that the shareholder or shareholders gave to the company in return for shares. However, the PUC value of shares usually starts out as the same value as the Legal Stated Capital of the shares, but corporate transactions can change the value of PUC while the LSC of shares tend to remain the same.
Points to remember:
1. PUC of one share = the average value of all shares in a class.
2. Contributed surplus results when the increase of the net assets is greater than the increase in PUC.
3. Contributed surplus can be converted to PUC under s. 84(1)(C.3).
Planning: It may pay to do a conversion to avoid a deemed dividend and/or capital loss.
The ACB, (adjusted cost base) of shares can vary from PUC significantly. This is because paid-up capital is not a concept connected with the shareholder, as is ACB. The paid-up capital is connected with the class of shares. It is computed at a given point in time, taking account of all the capital paid to the corporation for the shares issued in a given class on the date in question, regardless of who actually paid these amounts. The paid-up capital represents the return of capital that may be received by a shareholder without the amount being subject to tax as a dividend. The adjust cost base is based on what was actually paid for a share or group of shares. For instance, originally the ACB and PUC of 100 shares will usually be the same when the shares are issued. If those shares are sold to another person for a higher amount, the new ACB is what the new shareholder paid. If the new owner of the shares paid $500 for the shares and the original PUC and ACB of the shares was $200. The paid-up capital of a share is not affected by the subsequent purchase or sale of the shares. This distinction between the paid-up capital of shares and their ACB is important. The paid-up capital serves to determine whether there is a deemed dividend in the case of most transactions.
When shares are redeemed the PUC value is not taxed. Paid-up capital is a measurement of the amount of capital that can be returned to shareholders tax-free. It also generally represents the amount the corporation received as consideration for a class or series of shares it issued to its shareholders. The redemption amount minus PUC is a deemed dividend. This deemed dividend is subtracted from the redemption amount to give the proceeds of disposition. Capital gains will occur if the proceeds for the share (POD) is grater than he adjusted cost base of the shares.
An example of a shareholder “redeeming” or cashing in shares would look something like this. Where a corporation redeems shares for an amount in excess of the shares paid-up capital, the excess is a “deemed dividend” to the shareholder. For example, assume that the stated capital and paid-up capital of a share are $100, and its adjusted cost base is $150. If the corporation redeems the share for $130, the shareholder is deemed to receive a dividend of $30.
Cash paid on redemption $ 130
Paid-up capital 100
Deemed dividend 30
(The dividend is reported on shareholders tax return. The shareholder obtains a tax credit on the dividend if the corporation that redeems the share is a Canadian corporation.)
The Income Tax Act also deems the shareholder to have derived proceeds of disposition, which may trigger a capital gain. In order to prevent double taxation, however, the Act reduces the shareholder‘s proceeds of disposition by the amount of the deemed dividend, that is, $80.
Cash paid on redemption $ 130
Less: deemed dividend (30)
Proceeds of disposition $ 100
Less: adjusted cost base (150)
Capital loss (50)
(The capital loss is reported on shareholders tax return. Only 1/2 of the capital loss of $50 is deductible for tax purposes, and then only against the shareholder’s capital gains. )
Example of PUC and ACB of shares when issued and sold:
If someone bought 100 Class A shares issued by Corporation Xat $10 a share the PUC for the shares to the corporation at the time of acquisition would be $1,000 (i.e., 100 x $10).
That would also be the ACB to the shareholder that purchased the shares.
If in the future if the shareholder sells the shares for $2,000 to another person, the vendor would realize a capital gain of $1,000 (i.e., $2,000 – $1,000).
The ACB to the new shareholder is what he paid, $2,000, which remains so until the new owner sells the shares for another price. The
PUC for the shares stays the same at $1,000 because the 100 shares were originally issued from the corporation at $10 per share.
CAPITAL DIVIDEND ACCOUNT
The nontaxable half of capital gains is stored in a “Capital Dividend Account”. Money from this account can be returned to shareholders tax free, for Private Corporations. Also the nontaxable portion of Eligible Capital Property (such as goodwill, patents, trademarks, etc.) is returnable tax free to shareholders. Also, the excess of life insurance policies proceeds over the ACB of the policy is put into the CDA and is returnable tax free to shareholders.
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retrieved from:
http://www.cra-arc.gc.ca/E/pub/tp/it64r4-consolid/it64r4-consolid-e.txt
Corporations Can Be Related but Not Associated
Paragraph 5. Two corporations can be "related persons" as defined in subsection 251(2) and still not be associated with each other under subsection 256(1).
As an example, if 65 per cent of the voting shares of Corporation A are owned by Mr. A and 60 per cent of the voting shares of Corporation B are owned by his brother, Mr. B,
the corporations are "related persons" pursuant to subparagraph 251(2)(c)(ii);
however, the two corporations would not be associated with each other
unless the cross-ownership test in paragraph 256(1)(c), as discussed in paragraph 27, were met.
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(Friday, January 15, 2010)
Summary
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There are three general exceptions to shareholder loan provisions under the income Tax Act.
1. One Year Rule – If the loan is repaid by the shareholder within the year following the end of the corporations’ tax year, the loan is not included in income.
However, the loan cannot be a series of loans and repayments. On the other hand, if a current loan account is maintained in the corporation for a shareholder during a tax year and the year-end balance is repaid from salary or declared dividends the CRA will generally not consider these transactions as a series of loans or repayments.
2. The LendersRule – If the corporations’ business is lending money or the debt is from the normal business activities then the loan is not considered a shareholder loan, provided standard arrangements are made for repayment are made and maintained.
3. Principal Residence Rule – If the shareholder is also an employee and a loan is advanced to purchase a principal residence, new shares in the corporation, or a vehicle to be used for business purposes then the loan is not considered income. In addition, the loan must be advanced due to employment and not due to shares held and standard arrangements are made for repayment are made and maintained.
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New Dividend Tax Credit
Draft legislation may lower personal taxes on dividend income.
FROM: NOV-DEC 2006 ISSUE | BY MANU KAKKAR
In June, the Department of Finance released draft legislation designed to alter the taxation of eligible dividends in order to level the playing field for corporations paying tax on income subject to the high rate of income tax but not subject to integration (the types of income not subject to integration include public corporations’ income and Canadian controlled-private corporations’ (CCPC) active business income not subject to the small business deduction (SBD)).
The intent was to reduce the tax on dividends paid from these types of corporate income ("eligible dividends") by increasing the corresponding dividend gross-up to 45 per cent from 25 per cent and the dividend tax credit to 11/18 of the gross-up.
These tax changes treat the income earned through a corporation and then distributed as a dividend the same as income flowed through directly to the investor via an income trust; a decline of more than $5 per $100 of dividend income at the personal federal income tax level. The decision to reduce the tax rate on eligible dividends and simultaneously not to impose a new tax on income trusts was met with euphoria on the capital markets.
Draft Legislation Highlights
This draft legislation need only be considered if a corporation decides to pay its shareholders an eligible dividend subject to the reduced rate of personal income tax as opposed to taxable dividends subject to higher rates ("ineligible dividends") after 2005. The new rules introduce two new tax pools:
Even though the two pools sound similar, they perform very different functions. The GRIP is the "good pool" from which eligible dividends can be paid from a CCPC without any further tax implications. The LRIP is the "bad pool," which limits the eligible dividends that can be paid from non-CCPCs and public corporations until such pool is fully distributed to shareholders as ineligible dividends.
GRIP generally comprises 68 per cent of a CCPC’s active business income not subject to the SBD and other eligible dividends received from other corporations. This represents the "high tax rate active business income" retained earnings pool of a corporation from which an eligible dividend can be paid. As a corollary, 32 per cent represents the combined federal and applicable provincial income taxes to which a corporation’s high rate active business income is presently subject. Currently, the high rate federal active business income tax is approximately 22 per cent. Presumably, 10 per cent represents an average of the provincial high rate of active business income.
LRIP is the pool balance that may be present only in non-CCPCs and public corporations. An LRIP balance is an accumulation of tax-paid retained earnings that were subject to preferential rates of tax (active business subject to the SBD or investment income) when the corporation was a CCPC, and ineligible dividends received from other CCPCs. Public corporations and non-CCPCs must first pay ineligible taxable dividends from their LRIP pool before paying eligible dividends in order to avoid further tax consequences.
The corporation must, in writing, designate a dividend as eligible and notify all of the recipients at the time the eligible dividend is paid.
There shall be a new corporate distributions tax if, in most cases, a corporation pays an eligible dividend and such designation is made in excess of the GRIP pool (or for public corporations, the eligible dividend was designated at such a time when an LRIP balance existed) at a rate of 20 per cent of the excess amount designated. In a situation where a certain anti-avoidance rule applies, the penalty tax would be 30 per cent of the total eligible dividend designated. A non-arm’s-length shareholder is jointly and severally, as well as solidarily, liable for the corporation’s penalty tax.
Therefore, if a corporation notifies its shareholder of paying an eligible dividend and it is subsequently discovered that the corporation has designated and paid an excessive eligible dividend, it is the corporate payer alone who is subject to any kind of penalty tax; the shareholder shall still be entitled to the enhanced tax benefits. The result is equitable because the corporate distributions tax places the onus of responsibility for eligible dividends on the corporation and not the shareholder.
Any corporation resident in Canada that pays a taxable eligible or ineligible dividend in its taxation year ending after 2005 shall file an additional schedule with its regular T2 corporation tax return, such as Schedule 3, which calculates the Part IV tax liability of a corporation.
Parallel special rules apply to the computation of a corporation’s GRIP or LRIP when it becomes or ceases to be a CCPC and when it has been party to an amalgamation or a wind-up. Further, the computation of both pools shall commence for corporations whose taxation years end after 2005.
Since the GRIP and LRIP serve different functions, it is not surprising that there are many differences between the two. The most notable are:
This significant difference between the two pools should be considered a gift from the Department of Finance, which is permitting CCPCs to increase prior years’ GRIP from which more eligible dividends can be paid to shareholders after 2005. However, the department is not enacting similar legislation for the LRIP that would increase the barrier non-CCPCs and public corporations would have from paying eligible dividends.
These new rules will have widespread implications for all aspects of tax planning, particularly for owner-manager businesses. Conventional tax wisdom may have to be reconsidered in certain situations, such as:
The answers to these questions will not be available until all of the provinces confirm their responses to the federal eligible dividend legislation. At the time this article was written, the only provinces that had announced their intention regarding the federal eligible dividend legislation were Ontario, Quebec, Manitoba, and Nunavut. It shall be interesting to see what the other provinces introduce in terms of provincial legislation.
[ TOP ]
Manu Kakkar, MTax, CA, CGA, is an independent tax consultant specializing in personal, corporate, estate and trust tax planning, corporate reorganizations, divestitures and acquisitions, scientific research, and experimental development tax credits. E-mail manu@kakkar.com.
"Tax Strategy" is co-ordinated by J. Thomas McCallum, CBV, FCGA, a business valuation and income tax consultant based in Whitby, Ontario, and author of several CGA-Canada professional development courses. E-mail jtmc@jthomasmccallum.com.
The information appearing in "Tax Strategy" is provided for the interest of the readers. Neither CGA Magazinenor the column authors and co-ordinator assumes any responsibility or liability to any persons relying on the information in the article to perform tax planning and/or compliance of any kind.
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u dont have to keep improving but u cannot stop ur competitors 