Which of the following conditions is NOT required for ITA 84.1 (dividend stripping rules)to be applicable?
A)The shares that are disposed of must have been held as capital property.
B)The subject corporation must be associated with the purchaser corporation after the disposition of the shares.
C)The share disposition must be made to a corporation with which the taxpayer does not deal at arm's length.
D)The taxpayer who disposes of the shares must be a Canadian resident.

Question

Quizplus · Accepted Answer

ITA 84.1 is designed to prevent individuals from converting what would otherwise be a capital gain into a tax-preferred dividend by selling shares to a corporation with which they do not deal at arm's length. The rule does not require that the subject corporation be associated with the purchaser corporation after the disposition of the shares. This condition is not part of the criteria for ITA 84.1 to apply, making choice B the correct answer.

Which of the Following Conditions Is NOT Required for ITA