Lecture 3 Associated, connected, SBC examples September 17, 2023

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May 24, 2024

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Associated corporations – September 17, 2023 s. 256(1)(a) One corporation controls the other Taxpayer owns A Ltd. and A Ltd. owns 75% of B Ltd. 75% A B
2 s. 256(1)(b) Two corporations controlled by the same person or group of persons Example 1 Mr. A owns 75% of A Ltd. and 75% of B Ltd. Mr. A 75% 75% Example 2 M Ltd. is owned 10% by Mike and 45% by Ken. K Ltd. is owned 20% by Mike and 35% by Ken. Mike and Ken 55% 55% A B M K
3 Example 3 Mr. and Mrs. X are married. H Ltd. is owned 51% by Mr. X and 2% by Mrs. X = 53% W Ltd. is owned 51% by Mrs. X and 5% by Mr. X = 56% Mr. and Mrs. X 53% 56% H W
4 s. 256(1)(c): Two related persons control two different corporations. One person owns 25% or more of each corporation. An example with Mr. and Mrs. X: H Ltd. is owned 51% by Mr. X and 25% by Mrs. X W Ltd. is owned 51% by Mrs. X Mr. X Mrs. X 51% 25% 51% W H
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