Corporate restructuring – Section 85: Transfer of property
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Clients often engage professional accountants to assist with transactions designed to accomplish objectives such as creditor proofing, estate planning, and corporate restructuring. These transactions require that practitioners possess comprehensive knowledge of Section 85 in the Income Tax Act in order to meet the client’s objectives in a tax-efficient manner. Section 85 interacts with several related and anti-avoidance provisions that professionals should understand in relation to these engagements.
In order to help practitioners and other tax professionals assist clients and others with property transfer engagements, this seminar covers selected tax aspects explaining the transfer of property to a corporation using the Section 85 rollover rules. Each module contains specific examples and cases designed to help participants review relevant tax theory and focus on major tax planning issues, including filing requirements and ensuring the transaction is not caught by key anti-avoidance provisions.
By the end of this training activity, participants will be able to:
- Identify the conditions necessary to make a Section 85 election and the property eligible to transfer under Section 85;
- Apply the upper and lower limits of an “agreed amount” for the transfer or property;
- Determine the cost amount of property transferred under Section 85;
- Be aware of the relevant anti-avoidance rules associated with a transfer of property under Section 85;
- Complete a T2057 election form and be aware of the deadlines for filing a Section 85 election and related penalties.
- The purpose and use of Section 85 of the ITA
- Conditions of application
- Agreed amount: election and limits
- Cost of consideration and other rules
- Paid-up capital and legal characteristics of shares received
- Anti-avoidance rules and other considerations
- Election deadline and penalties
Tax professionals and practitioners who seek improved knowledge about Section 85 and the process for correctly preparing and filing a T2057 election.