Items included in income - Canada

The following items are included in income of taxpayer for a taxation year:

Alimony or maintenance payments (s. 56(1)(b) and s. 56(1)(e))

Allowances for personal, living, or any other expenses paid to an employee or officer (s. 6(1)(b))

Amounts allocated to an employee under and employees’ profit sharing plan (s. 6(1)(d) and 12(1)(n))

Amounts deducted by the vendor on a sale of accounts receivable are included in purchaser’s income (s. 22(1))

Amounts not taxed to a deceased person which are transferred to a beneficiary (s. 70(3))

Amounts of an income nature payable by a trust or estate to the taxpayer as beneficiary (s. 12(1)(m) and s. 104(13))

Amounts of pension income allocated to the taxpayer’s spouse or common-law partner after 2006 (s. 561(1)(a.2))

Amounts paid by a trust or estate for upkeep, etc, for property to be maintained for benefit of beneficiary (s. 105(2))

Amounts paid on income bonds deemed dividends (s. 15(3))

Amounts paid to another person at the direction of or with the occurrence of the taxpayer (s. 56(2))

Amounts receivable for restrictive covenants agreed to after October 7, 2003 (s. 6(3.1))

Amounts receivable in the future for property sold or services rendered in course of business in the year (s. 12(1)(b))

Amounts receivable of an income nature by a deceased person (s. 70(2))

Amounts received by non-life insurance companies, whether mutual or not, from any arrangement to insure (s. 138)

Amounts received by non-life insurance companies, whether mutual or not, from property vested in the (s. 138)

Amounts rendered for services or goods not rendered or delivered in the year, or for returnable containers (s. 12(1)(a))

Annuity payments (s. 56(1)(d))

Appropriations by a corporation for the benefit shareholders (s. 15(1))

Automotive industry employees’ transitional assistance (s. 56(1)(a)(v))

Bad debts recovered (s. 12(1)(i))

Benefits conferred by non-arm’s length transactions (s. 245(2))

Benefits (except those constituting a distribution or payment of capital) from or under any trust (s. 12(1)(m) and s. 105(1))

Benefits or advantages (with certain exceptions) conferred by corporations on shareholders (s. 15(1)(c))

Benefits received under Home Buyers’ plan (s. 56(1)(h.1) and s. 140.01)

Benefits received under registered retired savings plans (s. 56(1)(h), s. 146(8))

Benefits under employee benefit plans or trusts (s. 6(1)(g) and s. 6(1)(h))

Benefits under the labour adjustment benefit act, the Department of Northern Cod Compensation and Adjustment Program (s. 56(1)(a)(vi))

Benefits received after 2005 under the new Quebec Parental Insurance Plan (s. 56(1)(a)(vii))

Board, Lodging and other benefits attached to an office or employment (s. 6(1)(a))

Capital gains – ½ included in income with certain exceptions (s. 3, s. 38)

Certain amounts received by a person from another who is, was, or is about to be his or her employer (s. 6(3))

Company automobile, value of personal use (s. 6(1)(e) and s. 6(2))

Death benefits (s. 56(1)(a)(iii))

Deemed dividends from non-tax-paid corporate surplus, by reason of:

a-         A distribution or appropriation on the winding-up, discontinuance, or reorganization of business (s. 54(2))

b-         Redemption, acquisition, or conversion of common shares (s. 84(3))

c-         Capitalization of undistributed income by stock dividend, increase in paid-up capital, or otherwise (s. 84(1))

Deferred profit sharing plan payments (s. 56(1)(i))

Director’s fees (s. 6(1)(c))

Dividends, including stock dividends (s. 82(1) and s. 121)

Evidence of indebtedness received in lieu of payment of income debt (s. 76)

Fair market value of assets sold or distributed to shareholders at a price below such value (s. 69(4) and s. 69(5))

Fees (s. 6(1)(c))

Fellowships, scholarships, and research grants (s. 56(1)(n) and 56(1)(o))

Gratuities (s. 5(1))

Income – averaging annuity receipts (s. 56(1)(e) and s. 56(1)(f))

Income from controlled trust deemed settlor’s (s. 75(2))

Income from property transferred to minor until he is 18 is deemed to be transferor’s (s. 75(1))

Income from property transferred to spouse deemed to be transferor’s (s. 74(1))

Income from eligible funeral arrangement (s. 148.1)

Income of trusts and estates payable to beneficiaries (s. 104(13))

Insurance payments for damage in depreciable property which are expended in the taxation year and within a reasonable time on repairing the damage (s. 12(1)(f))

Insurance premium (except for group life or medial services) paid by employer for the benefit of employee (s. 6(1)(a))

Interest deemed received on certain loans to non-residents (s. 17(1))

Interest on bond transferred with interest until the date of transfer (s. 20(14))

Interest payments (s. 12(1)(c))

Interest payments which are blended with capital payments (s. 16)

Inventory sale proceeds (s. 23 and s. 28)

Loans by corporations to shareholders (s. 15(2))

Medicare contributions by employer (s. 6(1)(a))

Patronage dividends, except those from consumer goods and services (s. 135(7))

Payments based on the use of or production from property (s. 12(1)(g))

Payments by corporation to shareholders other than in bona fide transaction (s. 15(1))

Pension benefits (s. 56(1)(a))

Periodic payments which are deemed to accrue daily where a person dies (s. 70(1))

Portion of beneficiaries’ share of profits under employees’ profit sharing plan (s. 144(7))

Profit from business (s. 9(1))

Profit form property (s. 9(1))

Recaptured depreciation (s. 13(1))

Remuneration (s. 5(1))

Reserves deducted in previous year (s. 12(1)(d))

Reserves of banks which are unreasonably large in the opinion of the Minister of Finance (s. 26(1))

Resource property sale receipts (s. 59)

Retirement compensation arrangement payments (s. 12(1)(n.3))

Retiring allowance (s. 56(1)(h))

Salary (s. 5(1))

Salary deferral arrangement payments (s. 6(1)(e))

Securities received in lieu of payment of income debt (s. 76)

Social assistance payments (s. 56(1)(r) and s. 56(1)(u))

Stock rights granted to employees (s. 7(1))

Superannuation benefits (s. 56(1)(a)(i))

Supplementary unemployment benefit plan payments (s. 56(1)(g) and s. 145(3))

Top-up disability payment (s. 6(18))

Transfer of right to income in a non-arm’s length transaction (without transfer of source) results in income remaining the transferor’s (s. 56(4))

Employment insurance benefits (s. 56(1)(a))

Wages (s. 5(1))

Workers’ compensation payments (s. 56(1)(v))

Disclaimer:

This information is for educational purposes only. It does not constitute any legal advice or opinion. Please do not use any of its contents without seeking a professional advice.

References:

Canadian Master Tax Guide by CCH

Mansoor Suhail (Mani)

Accountant

BSBA – EA – ICIA – RA

Tax for Canada and U.S.A

Web: www.theaccountingandtax.com and www.taxservicesguru.com

Blog: http://taxservicesguru.blogspot.ca

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