Mr. X wholly-owned ACo and his wife, Mrs. X, wholly-owned BCo. ACo and BCo were not associated. Neither company provided services or property, directly or indirectly, in any manner whatever, to the other. Would either CCPC be considered to have earned income described in s. (a)(i) of the definition of “specified corporate income” in s. 125(7), i.e., would s. 125(1)(a)(i)(B) carve out any such income from that income eligible for the small business deduction?
CRA responded:
[A]s there is no income that is received (directly or indirectly, in any manner whatever) from the provision of services or property between ACo and BCo, there would not be any income that would be as described in subparagraph (a)(i) of the SCI definition … .