CO-771.1.3.AT – Business Limit Allocated To A Corporation That Has ...

CO-771.1.3.AT – Business limit allocated to a corporation that has specified corporate income

The following definition is given in subsection 125(7) of the federal Income Tax Act:

Specified corporate income, of a corporation for a taxation year, means the lesser of

1. the lesser of
1. the total of all amounts each of which is income from an active business of the corporation for the year from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if
1. at any time in the year, the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and
2. it is not the case that all or substantially all of the corporation’s income for the year from an active business is from the provision of services or property to
1. persons (other than the private corporation) with which the corporation deals at arm’s length, or
2. partnerships with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, and
2. the total of all amounts each of which is the portion, if any, of the business limit of a private corporation described in subparagraph (i) for a taxation year that the private corporation assigns to the corporation under subsection (3.2), and
2. an amount that the Minister determines to be reasonable in the circumstances.

See Also

Schedule 7, Aggregate Investment Income and Income Eligible for the Small Business Deduction