ordinary course of the business

19 October 2023 Internal T.I. 2020-0856851I7 - Ordinary Course of Business -- summary under Paragraph 258(4)(a)

In 2010, a Canadian corporation, which was a specified financial institution by virtue of being controlled by its parent, a Canadian insurance corporation, subscribed for 9,350,000 mandatory redeemable preferred shares of Luxco 1 (“MRPS” – subsequently, “Class A MRPS”) for US$935,000,000. Luxco 1 used those proceeds to make loans to US foreign affiliates for use in the corporate group’s US operations. In 2012, the MRPS and common shares of Luxco 1 were transferred on an s. 85(1) rollover basis to a Canadian subsidiary (XXXXXXXXXX).

3 May 2006 Internal T.I. 2005-0133341I7 F - Cours normal des activités de l'entreprise -- summary under Subsection 112(2.1)

As part of a reorganization relating to the sale of a share investment in Bco by Aco (a specified financial institution), a partnership of which Aco was a member received dividends on term preferred shares of Gco. Regarding whether the exception for dividends not received in the ordinary course of the business applied, the Directorate first noted that it was its position that in the s.

By services, 28 November, 2015

576315 Alberta Ltd. v. The Queen, 2001 DTC 776 (TCC) -- summary under Subparagraph 20(1)(p)(ii)

The taxpayer ("241467"), which previously had engaged exclusively in a leasing business, was found to be engaged in a financing business that included the lending of money in light of the fact that of 24 identified transactions (including non-interest-bearing loans to the shareholder or relatives, which Bonner J regarded (at para. 7, as "falling outside the scope of business"), approximately 16 were interest-bearing loans made over a four-year period including various loans to finance trucking businesses. (After noting (at para. 8) the "distinction ...

By services, 28 November, 2015

Bastion Management Ltd. v. The Queen, 95 DTC 5238, [1995] 2 CTC 252 (FCA) -- summary under Paragraph 20(1)(gg)

The taxpayer, which was a trader in commodity futures, purchased 15,000 ounces of gold and 500,000 ounces of silver shortly before its year-end and, at the same time, sold futures contracts for corresponding quantities of gold and silver at the same prices, for delivery after its year-end. Shortly after its year-end, it sold the gold and silver and liquidated the futures contracts.

By services, 28 November, 2015

Société d’Investissement Desjardins v. Minister of National Revenue, 91 DTC 393, [1991] 1 CTC 2214 (TCC) -- summary under Subsection 112(2.1)

The taxpayer, which was a venture capital corporation, was found not to have received a deemed dividend on a term preferred share in the ordinary course of the business carried on by it. The term preferred shares, which were held by the taxpayer for only nine days before their redemption, were not acquired in accordance with the taxpayer's investment philosophy, which was to acquire medium- and long-term investments. Instead, they were acquired as part of an arrangement to maintain the taxpayer's voting interest in the corporation notwithstanding the issuance of voting shares to employees.

ordinary course of the business