Syllabus

Income Tax Law

(Revised March 2016)

Candidates are advised that the syllabus may be updated from

time-to-time without prior notice.
Candidates are responsible for obtaining the
most current syllabus available.

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K1P 1A4

Income Tax Law

Required Readings: Krishna, The Fundamentals of Canadian Income Tax (Toronto:
Carswell, 2014). (FCIT)
Edgar, Cockfield, OBrien, Materials on Canadian Income Tax, 15th ed.
(Toronto: Carswell, 2015). (MCIT)
Income Tax Act Sections as Indicated. (ITA)

Recommended:

Hogg, Magee, Li, Principles of Canadian Income Tax Law, 8th ed.
(Toronto: Carswell, 2013)

The syllabus readings are an introduction to the Canadian income tax system including tax
policy objectives, statutory interpretation, and case law. Major topics include the basic personal
income tax structure, taxation of intermediaries (overview only), income from a source, statutory
interpretation, taxing residents and non-residents, tax treatment of employment, business,
investments and capital gains, tax avoidance and the General Anti-Avoidance Rule (GAAR),
taxation of families and dependents, an overview of deductions and credits.

TOPIC

READINGS

I. INTRODUCTION: POLICY, POLITICS, DESIGN

A. The Tax Systems Role as an Economic
and Social Policy Instrument

FCIT Chapter 1
MCIT 10-19; 36-75, 745-752

1. Criteria: Equity, Efficiency,

Simplicity; Certainty
2. Economic and Financial Concepts
3. Tax Bases and Tax Mix
4. Tax Expenditures Concept and Criteria
5. Overview of Tax Process: Filling,
Assessment, Appeals, Burden of Proof

ITA Sections 2, 3, 4

B. ITA: Overview of Basic Structure

FCIT Chapter 4
FCIT Chapter 13

1. Who, What, and When

2. Section 3

MCIT 81-100
MCIT 111-115 (Income Splitting)

3. Income from a Source

4. Tax Unit
5. Personal Income Tax Rates

MCIT 685-691 (Corporate Overview)

6. Corporate Income Tax Structure

FCIT Chapter 2, pp. 46-55

MCIT 754-769

C. Statutory Interpretation

TOPIC

READINGS

II. WHO IS SUBJECT TO TAX

A. Residents

ITA S 2(1); 2(3); S 114; Sub-s

250(1)(a); 250(3); 250(5). S
253,250(4)(a)(c)

1. Individuals
2. Corporations

S 248(1) definitions: individual; nonresident; resident; person

FCIT Chapter 3
MCIT 117-149

B. Non-Residents and Tax Treaties

FCIT Chapter 3
MCIT 172-183

C. First Nations Taxation

FCIT Chapter 3
MCIT 184-198

TOPIC

READINGS

III. EMPLOYMENT
A. Who is An Employee
FICT Chapter 6
MCIT 199-219

1. Independent Contractors

ITA S 5; 6 (1)(a); 6(1)(b); 6(1)(e); 6(1)(f);

6(1)(j) 6(3) - (3.1); 6(9); 80.4; 6(15)(15.1); 6(16), 6(19)-(23); 7

B. Employment Income: Inclusions

FICT Chapter 6
MCIT 219 260; 266-272
ITA S 8 (1)(b); 8(1)(f); 8(1)(h); 8(1)(i);
8(1)(j); 8(1)(q); 8(1)(p); 8(1)r; 8(13) 8(2)

C. Employment Income: Deductions

FCIT Chapter 6
MCIT 272-276 and notes 1,2, 8-16
MCIT 281-289
D. Terminating Employment Relationships

ITA S 248(1) retiring allowance; death

benefit 56(1)(a)(ii)(iii); 60(j.1); 60(o.1);
62
FICT Chapter 10, pp. 423-426
MCIT 737-738

TOPIC

READINGS

IV. INCOME FROM BUSINESS AND PROPERTY

ITA S 9, Sub-s 248(1) "business",
"property"

A. Overview and Characterization

1. What Constitutes a Business

FCIT Chapter 7
MCIT 291-293, 297-311

2. Business or Property Income

ITA Para 12(1)(c), Sub-S 12(3),(4)

B. Types of Property Income

FCIT Chapter 7
FCIT Chapter 8, 289-293 (top)
MCIT 311-315 thru Legal Meaning
of Interest; 322-328
ITA S 9, para 18(1)(a),(b),(h), S 67,
67.1, 67.2;67.6; 20(1)(c)(i)(ii);20(3);
ITA 67.5

C. Deductions to Determine Profit

1. General Approach
2. Personal and Living Expenses

FCIT Chapter 9
MCIT 328-408 (omit Benton and
Bronfman Trust); 455-486, skim 486508

3. Expenses of an Illegal Business

4. Fines, Penalties, Damages
5. Interest
6. Capital Outlays: CCA and ECE
7. Specifically Prohibited Deductions

TOPIC

READINGS

V. CAPITAL GAINS AND LOSSES

ITA paras 3(b)(d), S 38, paras
39(1)(a),(b), Sub-s 39(9), paras
40(1)(a)(i),(b)(i),&(b)(ii), Sub-s 41(1), S
45, para 46(1)(a), Sub-s 46(2), scan SS
53, 54 & 68, paras 54(c),(h),(g)

A. Overview
B. Capital Gains v. Adventure in the
Nature of Trade
C. Capital Gains Framework

FCIT Chapter 11, pp. 438-447; 451-455

(top); 459-464 (top)
FCIT Chapter 7, pp. 276-277
MCIT 511-575

D. Specific Issues and Transactions

1. Intra-Family Transfers
2. Principle Residence
3. Change of Use
4. Small Business Corporations

TOPIC

READINGS

VI. REFINING WHAT IS TAXED: FROM INCOME TO TAXABLE INCOME

FCIT Chapters 12, 14 (579-593), 15
(623-639)
MCIT: Chapter 8

TOPIC

READINGS

VII. PLANNING, EVASION, AVOIDANCE

FCIT Chapter 2, pp. 53-61

A. Review Statutory Interpretation

MCIT 750-770
B. Tax Evasion, Tax Avoidance

ITA S 245, 69, 67, 163, 163.2, 248(10)

1. Judicial Limits

MCIT 769-814

2. GAAR: General Anti-Avoidance Rule

3. Other provisions
4. Tax Shelters