Shane Onufrechuk Writes on Tax Traps and Tips
This month, an article written by one of Davis' senior tax advisors, Shane Onufrechuk, C.A., "Tax Traps & Tips: Why It Pays to Stay "Connected,'" appeared in the Chartered Accountants of BC magazine, Beyond Numbers.
"The Income Tax Act (ITA) contains a myriad of terms that describe and define the nature of relationships between taxpayers for income tax purposes. Taxpayers can be "connected," "associated," "affiliated," "related," and/or "not deal[ing] at arm's-length." For many accountants, it can be difficult to remember the distinctions between these terms. Unfortunately, failing to remember these distinctions-particularly with regard to the definition of "connected corporations"-can prove costly. As this article will demonstrate, concluding that two corporations are connected when, in fact, they are not, can result in material adverse income tax consequences. "