Author: Bader A. Chowdry, CPA, CA, LPA

Use Section 85 when you are transferring assets (real property, inventory, depreciable capital, most eligible property) to a corporation, or exchanging shares while receiving any non-share consideration (boot). Use Section…

Part IV tax under ITA s. 186 applies at 38.33% to (a) all portfolio dividends received by a private corporation from a non-connected Canadian corporation, and (b) dividends from a…

For 2026, the Lifetime Capital Gains Exemption is $1,275,000. An Ontario shareholder selling shares that meet the qualified small business corporation (QSBC) tests under Income Tax Act s. 110.6 can…

A Section 86 internal reorganization requires: (1) directors’ and shareholders’ resolutions approving the share exchange and share-condition changes, (2) articles of amendment filed with the corporate registry, (3) share-subscription documentation…

Only in specific structures. Section 88(1) permits a tax-deferred wind-up of a taxable Canadian corporation into its parent Canadian corporation, provided the parent owns at least 90% of the shares…

An estate freeze exchanges your existing common (growth) shares in an active corporation for fixed-value preferred shares at today’s FMV under a joint s. 85 or internal s. 86 rollover,…

A Holdco above your operating company gives you five core benefits: (1) creditor protection of accumulated after-tax retained earnings, (2) income-splitting flexibility (usually paired with a family trust), (3) multiplication…

Form T2057 (the joint s. 85(1) election) is due on or before the earliest income tax return filing due date of either party (transferor or transferee) for the tax year…