,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,b5efits 6,9dividuals1 ,corpor,ns &
  ,%>ehold]s f ,loans or ,debt
,numb]3 ,,it-#dba;,r#b
,date3 ,septemb] #i1 #aiib
,ref];e3 ,sec;ns #hj.d & #hj.e 7al
  subsec;ns #b7#c71 #d7#d71 #f7#i71
  #f7#ae71 #ae7#a71 #ae7#a.b71 #ae7#b71
  #ae7#i71 #aaj7#a.d71 #aae7#a71
  #bab7#b71 ! def9i;ns ( 8home reloc,n
  loan0 & 8specifi$ %>ehold]0 9 subsec;n
  #bdh7#a71 p>agraphs #f7#a77a71
  #h7#a77f71 #h7#a77h71 #h7#a77h4#a71
  #ab7#a77w71 #bj7#a77c71 #aaj7#a77j71
  #abe7#g77d71 #bad7#c77a71 subp>agraph
  #h7#a77j77;i7 (! ,act1 & sec;ns #dcjj
  & #dcja & subsec;n #bjj7#b7 (!
  ,regul,ns74

                                      #a
               ,applic,n             a#a
    
  ,? bullet9 c.els & replaces ,9t]pret,n
,bullet9 ,,it-#dba;,r dat$ ,july #i1
#aihd4 ,curr5t revi.ns >e 9dicat$
0v]tical l9es4

                ,summ>y
    
  ,? bullet9 4cusses ! tax,n ( b5efits
>is+ f c]ta9 9t]e/-free or l[-9t]e/
loans or debts4 ,! ,act sets \ a =mula &
v>i\s o!r rules =! calcul,n & 9clu.n 9
9come ( taxa# b5efits t may 2 deem$ 6h
be5 rcvd z a result ( rcvg loans or
9curr+ debts t e6ectively be> less ?an a
prescrib$ rate ( 9t]e/4 ,subject 6c]ta9
excep;ns1 ^! deem$ b5efit provi.ns >e
applica# if ! loan or debt is rcvd
0virtue ( an (fice or employ;t ( an
9dividual1 0virtue (! s]vices provid$ 0!
p]sonal s]vices busi;s (a corpor,n or
0virtue ( %>ehold+s 9 a corpor,n4 ,!
bullet9 expla9s ! "*i/ics ( v>i\s types
( loans & debts &! di6];es 9 tax      #b
             ,,it-#dba;,r#b          b#a
tr1t;t1 s* z ! mann] & circum/.es 9 : !
b5efits "u ^! provi.ns may 2 deducti# z
9t]e/ exp5ses1 &! 4t9c;n 2t loans rcvd
0virtue ( %>ehold+s & ^? rcvd 0virtue (
employ;t4 ,x al expla9s ! special rules
t apply 6loans or debts =! purpose (
relocat+ or pur*as+ a home4

          ,4cus.n & ,9t]pret,n
    
     ,b5efits 6,employees 7p>agraph
                  #a7
    
#a4 ,subsec;n #hj.d7#a7 applies 9 c]ta9
  circum/.es 6deem a b5efit 6h be5 rcvd
  0an 9dividual if1 0virtue (! (fice or
  employ;t or ! future (fice or employ;t
  ( t 9dividual1 any p]son or "pn]%ip
  rcvs a loan
--------------------------------------#b
  or o!rwise 9curs a debt4 ,subsec;n
  #hj.d7#a7 c simil>ly apply 6deem a
  b5efit 6h be5 rcvd 0a corpor,n c>ry+
  on a 8p]sonal s]vices busi;s01 z    #c
             ,,it-#dba;,r#b          a#b
  def9$ 9 p>agraph #abe7#g77d71 if any
  p]son or "pn]%ip rcvs a loan or
  o!rwise 9curs a debt 0virtue (!
  s]vices p]=m$ or 6be p]=m$ 0t
  corpor,n4 7,in ? bullet91 bo? s* an
  9dividual & s* a corpor,n >e ref]r$ 6z
  an 8employee047 ,subsec;n #hj.d7#a7 is
  al 3sid]$ 6apply if a retir$ employee
  rcvs a loan f a =m] employ] pursuant
  6an agree;t 5t]$ 96:ile ! retir$
  employee 0 / employ$ 0t =m] employ]4
  ,s9ce subsec;n #hj.d7#a7 applies 6a
  loan rcvd or debt 9curr$ 0any p]son or
  "pn]%ip1 ! debtor cd 9clude n only !
  employee b any o!r 9dividual1 corpor,n
  or "pn]%ip1 = example1 an employee's
  sp\se4 ,simil>ly1 ! loan or 9debt$;s
  may 2 provid$ 0any p]son or "pn]%ip &
  does n necess>ily h 6be provid$ 0!
  employ] or 9t5d$ employ] (! 9dividual
  or 0! "py = :om ! corpor,n p]=m$ or w
  p]=m ! p]sonal s]vices 7all (! abv >e
  ref]r$ 6in ? bullet9 z ! 8employ]074
  ,= example1 z 4cuss$ 9 #d 2l1       #d
             ,,it-#dba;,r#b          b#b
  subsec;n #hj.d7#a7 may apply if !
  employ] >ranges 6gu>antee or pay "s
  por;n (! 9t]e/ paya# on a loan made 0a
  bank or o!r -m]cial l5d] 6or on 2half
  (! employee or "s o!r p]son4 ,x is1
  h["e1 ess5tial t ! loan or 9debt$;s 2
  attributa# 6! employ;t or 9t5d$
  employ;t (! 9dividual1 or ! p]=m.e or
  future p]=m.e ( s]vices 0! corpor,n1 9
  ord] = subsec;n #hj.d7#a7 6apply4

,note3
  ,! draft ,am5d;ts 6! ,9come ,tax ,act
  & ,relat$ ,/atutes issu$ 0,m9i/] (
  ,f9.e on ,decemb] #bj1 #aiia 3ta9 an
  am5d;t 6subsec;n #hj.d7#a74 ,if ?
  am5d;t is 5act$ z propos$1 x w cl>ify
  = tax,n ye>s -m5c+ af #aiia t subsec;n
  #hj.d7#a7 al applies if a loan is rcvd
  or a debt is 9curr$ 0r1son ( or z a
  3sequ;e (a previ\s (fice or employ;t1
  z well z ! curr5t or an 9t5d$ (fice or
  employ;t4
                                      #e
          #hj.d7#a7 ,calcul,n        c#b
            7p>agraphs #b-c7
    
#b4 ,except ": subsec;n #hj.d7#d7
  applies 7see #ag 2l reg>d+ home
  pur*ase loans & home reloc,n loans71 !
  b5efit 9 respect (a loan or debt
  describ$ 9 subsec;n #hj.d7#a7 is !
  am.t 0: ! a7regate (
  7a7 9t]e/ calculat$ at ! prescrib$
    rate7s7 7see #ab 2l7 =! ye>1 on !
    total ( all
--------------------------------------#c
    s* loans & debts \t/&+ dur+ ! ye>1 &
  7b7 ! a7regate ( all 9t]e/ pd or paya#
    9 respect (! ye> on ! loans or debts
    0any (! foll[+ p]sons3
    7;i7 ! employ] or 9t5d$ employ] (!
      9dividual1
    7;ii7 any p]son 7except ! debtor7
      relat$ 6! employ]1
    7;iii7 a p]son or "pn]%ip : is1 or w
      be1 ! recipi5t ( s]vices p]=m$ or
      6be p]=m$ 0a corpor,n c>ry+ on a
      p]sonal s]vices busi;s1 or      #f
             ,,it-#dba;,r#b          a#c
    7;iv7 a p]son 7except ! debtor7 t
      does n d1l at >m's l5g? )! p]son
      or any memb] (! "pn]%ip ref]r$ 6in
      7;iii7 abv1
  exce$s ! a7regate (
  7c7 any 9t]e/ =! ye> pd 0any p]son or
    "pn]%ip 9 ! ye> or )9 #cj "ds "!af
    on any s* loans or debts1 &
  7d7 any por;n ( an am.t describ$ 9 7b7
    abv 9 respect (! ye> t is reimburs$
    9 ! ye> or )9 #cj "ds "!af 0! debtor
    6a p]son or 5t;y describ$ 9 7b7 abv
    :o made ! pay;t4
  
,example
#c4 ,! foll[+ example illu/rates !
  calcul,n (a b5efit "u subsec;n
  #hj.d7#a7 9 #aiij = an employee on a
  4#ajj1jjj loan f 8 or h] employ]4 ,!
  prescrib$ rate is #ac@3p =! f/ two
  qu>t]s 9 ! ye> & #ad@3p =! la/ two
  qu>t]s4 ,assume t )9 ! ye> or #cj "ds
  "!af 4#e1jjj ( 9t]e/ 0 pd on ! loan 0!
  employee & t a -pany relat$ 6!      #g
             ,,it-#dba;,r#b          b#c
  employ] pd 4#c1jjj ( 9t]e/ on ! loan
  on 2half (! employee 9 t p]iod4 ,al1
  )9 ! ye> ! employee repd 4#b1jjj 6!
  -pany t pd ! 4#c1jjj4
  7a7 ,prescrib$ rate
    multipli$ 0! loan am.t =!
    p]iod 9 ! ye>
    7;i7 #ac@3p multipli$
      04#ajj1jjj multipli$
      0#b ov] #d """""""""""""""" #f1ejj
    7;ii7 #ad@3p multipli$
      04#ajj1jjj multipli$
      0#b ov] #d """"""""""""""" 4#g1jjj
     """""""""""""""""""""""""" 4#ac1ejj
.,plus
  7b7 ,am.ts pd 0relat$ -pany "" 4#c1jjj
    ,subtotal """"""""""""""""" 4#af1ejj
--------------------------------------#d
,less
  7c7 ,am.ts ( 9t]e/
    pd 74#e1jjj plus
    4#c1jjj7 """"""""" 4#h1jjj
  
                                      #h
             ,,it-#dba;,r#b          a#d
  7d7 ,am.t repd
    0employee """""""" 4#b1jjj  4#aj1jjj
    ,b5efit
    6,employee """"""""""""""""" 4#f1ejj
  
         ,loans ,f ,?ird ,"pies
             7p>agraph #d7
    
#d4 ,x is alw a "q ( fact :e!r a loan
  rcvd or a debt o!rwise 9curr$ 0an
  employee f "s"o o!r ?an ! employ] is
  rcvd 80virtue (! (fice or employ;t0 =
  purposes ( subsec;n #hj.d7#a74 ,": a
  loan is 2+ negotiat$ &! employ]
  provides docu;t,n 6! l5d] 6support !
  employee's loan applic,n1 s* loans w
  g5],y 2 3sid]$ 6h be5 rcvd 80virtue (!
  (fice or employ;t04 ,"u ^! circum/.es1
  if an am.t is pd 6! l5d] 0! employ] 9
  ord] 6subsidize 9t]e/ co/s or 0!
  employ] 6! employee z a reimburse;t (
  9t]e/ pd1 s* >range;ts w n exclude !
  loan f ! provi.ns ( sec;n #hj.d4 ,on !
  o!r h&1 if an employee negotiates   #i
             ,,it-#dba;,r#b          b#d
  )! ?ird "py )\t any 9volve;t 9 ! loan
  agree;t 0! employ] or a p]son relat$
  6! employ]1 ! fact t ! employ] or a
  relat$ "py may at "s subsequ5t date
  directly or 9directly subsidize !
  employee's 9t]e/ co/ w n cause ! loan
  6be 3sid]$ 6be rcvd 80virtue (! (fice
  or employ;t04 ,9 s* a situ,n1 any
  b5efit 5joy$ 0! employee z a result (!
  subsidiz,n (! 9t]e/ co/s wd 2 9clud$ 9
  9come 0virtue ( p>agraph #f7#a77a74
  ,once x is e/abli%$ "u : sec;n !
  b5efit is 6be 9clud$ 9 9come1 subsec;n
  #d7#d7 precludes xs 9clu.n 9 9come "u
  ano!r sec;n4

     ,loans 6,transf]r$ ,employees
             7p>agraph #e7
    
#e4 ,employees may rcv l[ 9t]e/ or
  9t]e/-free loans :5 !y >e transf]r$
  0_! employ] 6a new loc,n4 ,! transf]
  may h be5 9itiat$ due 6matt]s ( lab\r
  rel,ns or 2c ! employee a3ept$ !   #aj
             ,,it-#dba;,r#b          c#d
  transf] 9 ord] 6reta9 8 or h] posi;n (
  employ;t4 ,if a loan is rcvd 0virtue (
  an (fice or employ;t (a transf]r$
  employee1 ! taxa# b5efit >is+ f ! loan
  wd 2 calculat$ pursuant 6subsec;n
  #hj.d7#a74

       ,b5efits ,>is+ 0,virtue (
      ,%>ehold+s 7p>agraphs #f-g7
    
#f4 ,subsec;n #hj.d7#b7 d1ls ) b5efits
  >is+ f loans rcvd or debts 9curr$
  0virtue ( %>ehold+s4 ,specific,y1 t
  subsec;n deems a
--------------------------------------#e
  b5efit 6h be5 rcvd 9 ! foll[+
  circum/.es3
  7a7 a loan is rcvd or a debt is 9curr$
    0a p]son or a "pn]%ip 7o!r ?an 0a
    corpor,n resid5t 9 ,canada or 0a
    "pn]%ip ( : ea* "pn] is a corpor,n
    resid5t 9 ,canada72
  7b7 ! p]son or "pn]%ip describ$ abv is
    7;i7 a %>ehold] (a corpor,n1     #aa
             ,,it-#dba;,r#b          a#e
    7;ii7 3nect$ )a %>ehold] (a
      corpor,n1 or
    7;iii7 a memb] (a "pn]%ip1 or a
      b5efici>y (a tru/1 t 0 a %>ehold]
      (a corpor,n1 &
  7c7 0virtue (! %>ehold+s describ$ 9
    7b7 abv1 ! p]son or "pn]%ip rcvd a
    loan f or o!rwise 9curr$ a debt 6!
    corpor,n1 or 6a relat$ corpor,n1 or
    6a "pn]%ip ( : t corpor,n or any
    relat$ corpor,n 0 a memb]4
  ,": ^! 3di;ns >e met1 ! p]son or
  "pn]%ip is 3sid]$ 6h rcvd a b5efit 9 !
  tax,n ye> equal 6! am.t1 if any1 0:
  7d7 9t]e/ on ea* loan & debt -put$ at
    ! prescrib$ rate =! p]iod 9 ! ye>
    dur+ : x 0 \t/&+
  exce$s
  7e7 ! 9t]e/ =! ye> pd 0any "py on ea*
    s* loan & debt 9 ! ye> or )9 #cj "ds
    "!af4
  ,! foll[+ example illu/rates !
  calcul,n (a b5efit "u subsec;n
  #hj.d7#b7 9 #aiij =a %>ehold] :o   #ab
             ,,it-#dba;,r#b          b#e
  borr[s 4#ajj1jjj f ! corpor,n & rcvs !
  loan 0virtue ( 8 %>ehold+4 ,!
  prescrib$ rate is #ac@3p =! f/ two
  qu>t]s 9 ! ye> & #ad@3p =! la/ two
  qu>t]s4 ,! loan 0 made on ,janu>y #a1
  #aiij1 & "! 7 no loan repay;ts4 ,!
  %>ehold] pd 9t]e/ ( 4#c1jjj dur+ #aiij
  & 4#b1ejj on ,janu>y #aj1 #aiia4

  ,! b5efit "u subsec;n #hj.d7#b7 is3

4#ajj1jjj multipli$ 0#ac@3p
  multipli$ 0#b ov] #d """"""""" 4#f1ejj
4#ajj1jjj multipli$ 0#ad@3p
  multipli$ 0#b ov] #d """"""""" 4#g1jjj
 """""""""""""""""""""""""""""" 4#ac1ejj
less 9t]e/ pd """""""""""""""""" 4#e1ejj
,taxa# b5efit """""""""""""""""" 4#h1jjj

#g4 ,subsec;n #hj.d7#h7 provides t a
  p]son is 83nect$ )a %>ehold]0 (a
  corpor,n if t p]son does n d1l at >m's
  l5g? )! %>ehold]4 ,! prec$+ /ate;t
  does n apply                       #ac
             ,,it-#dba;,r#b           #f
  if ! p]son :o does n d1l at >m's l5g?
  )! %>ehold] (! corpor,n is3
  7a7 a =eign a6iliate (! corpor,n or
  7b7 a =eign a6iliate (a resid5t (
    ,canada ) : ! corpor,n does n d1l at
    >m's l5g?4
  ,":1 0virtue ( %>ehold+s 9 a "picul>
  corpor,n1 a %>ehold] ( t corpor,n rcvs
  a loan f or o!rwise 2comes 9debt$ 6a
  relat$ corpor,n &! "picul> corpor,n
  pays 9t]e/ at ! prescrib$ rate 6!
  relat$ corpor,n1 no taxa# b5efit >ises
  "u subsec;n #hj.d7#b74 ,h["e1 9 s*
  cases1 a b5efit >ises "u subsec;n
  #ae7#a7 2c ! "picul> corpor,n has pd a
  debt on 2half (! %>ehold]4

          ,subsequ5t ,*anges 9
         ,rel,n%ips or ,3di;ns
             7p>agraph #h7
    
#h4 ,once a loan or o!r 9debt$;s 2comes
  subject 6! provi.ns ( sec;n #hj.d1 z
  describ$ abv1 x rema9s subject     #ad
             ,,it-#dba;,r#b          a#f
  6^? provi.ns = all tax,n ye>s z l;g z
  any "p ( x rema9s unpd4 ,?us1 ": !
  9itial 9debt$;s >ose 0virtue (!
  employ;t ( an 9dividual1 ! p]=m.e (
  s]vice 0a corpor,n c>ry+ on a p]sonal
  s]vices busi;s or ! %>ehold+s (a
  %>ehold]1 or a p]son 3nect$ )a
  %>ehold]1 sec;n #hj.d w 3t9ue 6apply
  ev5 if ! rel,n%ips or 3di;ns describ$
  abv subsequ5tly *ange4 ,= 9/.e1 if a
  loan 0 rcvd 0r1son ( employ;t1 sec;n
  #hj.d wd 3t9ue 6apply 6! \t/&+ bal.e
  (! loan ev5 af ! resign,n1 4missal or
  retire;t (! employee4 ,a loan rcvd
  0r1son ( %>ehold+s c 3t9ue 6be subject
  6sec;n #hj.d ev5 if ! recipi5t (! loan
  is no l;g] a %>ehold]4

      ,9clu.n 9 ,9come ( ,b5efits
      ,calculat$ ,"u ,sec;n #hj.d
             7p>agraph #i7
    
#i4 ,a b5efit calculat$ "u ! provi.ns (
  sec;n #hj.d is br"\ 96! 9come (    #ae
             ,,it-#dba;,r#b          b#f
  an 9dividual1 "pn]%ip1 corpor,n or
  %>ehold]1 z ! case may be1 pursuant 6!
  foll[+ provi.ns3
  7a7 ,subsec;n #hj.d7#a7 b5efits3
    7;i7 "u subsec;n #f7#i7 9 ! case (
      an 9dividual1
    7;ii7 "u p>agraph #ab7#a77w7 9 !
      case (a corpor,n t c>ries on a
      p]sonal s]vices busi;s z describ$
      9 p>agraph #abe7#g77d71 &
    7;iii7 "u subsec;n #ae7#i7 9 ! case
      (a p]son or "pn]%ip1 ": subsec;n
      #f7#i7 or p>agraph #ab7#a77w7
--------------------------------------#g
      does n require ! am.t 6be 9clud$ 9
      9come4
  7b7 ,subsec;n #hj.d7#b7 b5efits1 "u
    subsec;n #ae7#i74
  
  



                                     #af
         ,excep;ns 6,applic,n (      a#g
      ,subsec;ns #hj.d7#a7 & 7#b7
             7p>agraph #aj7
    
#aj4 ,g5]al excep;ns 6! applic,n (
  subsec;ns #hj.d7#a7 & 7#b7 >e provid$
  0subsec;n #hj.d7#c74 ,f/1 p>agraph
  #hj.d7#c77a7 provides t nei subsec;n
  #hj.d7#a7 nor 7#b7 applies if1 hav+
  reg>d 6all ! circum/.es 79clud+ ! t]ms
  & 3di;ns (! loan or debt71 ! 9t]e/
  rate on ! loan or debt is equal 6or
  grt] ?an ! rate t wd h be5 agre$ ^u at
  ! "t ! 9debt$;s >ose 2t hypo!tical
  "pies d1l+ ) ea* o!r at >m's l5g? if
  7a7 n"o (! hypo!tical "pies rcvd !
    loan or 9curr$ ! debt 0virtue ( an
    (fice or employ;t or ! %>ehold+ (a
    p]son or "pn]%ip1 &
  7b7 ! ord9>y busi;s (! hypo!tical
    cr$itor 9clud$ ! l5d+ ( m"oy4
  ,! abv excep;n does n apply if any
  "py1 o!r ?an ! debtor1 made or 0
  requir$ 6make any 9t]e/ pay;ts on !
  9debt$;s4                          #ag
             ,,it-#dba;,r#b          b#g
  ,second1 p>agraph #hj.d7#c77b7
  provides t nei subsec;n #hj.d7#a7 nor
  7#b7 applies if ano!r provi.n ( ,"p
  ;,i (! ,act br+s ! loan or debt 96!
  9come (! debtor4 ,= example1 nei
  subsec;n #hj.d7#a7 nor 7#b7 applies if
  subsec;n #ae7#b7 has alr br"\ ! loan
  or debt 96! taxpay]'s 9come4 ,h["e1 an
  assess;t "u subsec;n #ae7#b7 is n
  preclud$ ev5 if ! taxpay] has
  volunt>ily dcld a b5efit "u sec;n
  #hj.d4 ,subsec;n #ae7#b7 has prior;y
  ov] sec;n #hj.d4

      ,=giv5 ,loans 7p>agraph #aa7
    
#aa4 ,": a loan 6an employee is "pi,y or
  fully =giv5 af ,febru>y #ag1 #aihg1 !
  am.t =giv5 is 9come 9 ! h&s (!
  employee 9 a3ord.e ) subsec;n #f7#ae74
  ,h["e1 p>agraph #hj.d7#c77b7 wd n
  apply s z 6reduce any b5efit 9clud$ 9
  ! employee's 9come pursuant 6subsec;n
  #hj.d7#a7 9 a prior ye> 9          #ah
             ,,it-#dba;,r#b          c#g
  respect ( s* a loan4 ,9 s* prior ye>
  or ye>s1 no "p (! loan wd h be5 9clud$
  9 9come &! employee wd h 5joy$ ! use
  (! funds 9 ^? ye>s4 ,z an example1
  assume ,mr4 ;,x1 an employee ( ,,abc
  ,limit$1 rcvs an 9t]e/-free loan f 8
  employ] ( 4#be1jjj on ,janu>y #a1
  #aihg 0virtue ( 8 employ;t4 ,no
  pr9cipal repay;ts 7 made &! loan 0
  settl$ 9 ,june1 #aihh 0a pay;t (
  4#e1jjj4 ,a
--------------------------------------#h
  b5efit1 calculat$ pursuant 6subsec;n
  #hj.d7#a7 on ! full am.t (! loan1 wd 2
  9clud$ 9 ,mr4 ;,x's #aihg 9come4 ,mr4
  ;,x's #aihh 9come w 9clude ! am.t
  =giv5 ( 4#bj1jjj pursuant 6subsec;n
  #f7#ae71 &a b5efit -put$ "u subsec;n
  #hj.d7#a7 9 respect (! 4#e1jjj actu,y
  repd1 =! p]iod ? latt] am.t 0 \t/&+ 9
  #aihh4 ,no b5efit wd 2 -put$ "u sec;n
  #hj.d = #aihh 9 respect (! am.t =giv51
  z a result (! applic,n ( p>agraph
  #hj.d7#c77b74 ,h["e1 ? p>agraph    #ai
             ,,it-#dba;,r#b          a#h
  wd n s]ve 6reduce ! #aihg b5efit1 z no
  "p (! loan 0 9clud$ 9 ,mr4 ;,x's 9come
  9 #aihg4 ,simil>ly1 ": a loan 6a
  %>ehold] is =giv51 ! =giv5 am.t is
  9come 9 ! %>ehold]'s h&s "u subsec;n
  #ae7#a.b7 9 ! ye> ( =give;s1 b ? wd n
  reduce a b5efit 9clud$ 9 9come =a
  previ\s ye> pursuant 6subsec;n
  #hj.d7#b74 7,! =ego+ assumes t
  subsec;n #ae7#b7 did n e>li] apply 6!
  same loan47

       ,prescrib$ ,rate ( ,9t]e/
             7p>agraph #ab7
    
#ab4 ,! 8prescrib$ rate0 =! purposes (
  sec;n #hj.d is def9$ 0p>agraph
  #hj.d7#g77b7 & is det]m9$ 9 a3ord.e )
  sec;ns #dcjj & #dcja (! ,regul,ns4 ,af
  #aihc1 ! rate is det]m9$ qu>t]ly
  0ref];e 6! rate ( 9t]e/ on #ij "d
  ,gov]n;t ( ,canada ,tr1sury ,bills4

                                     #bj
      ,loans 6,%>ehold]-,employees   b#h
             7p>agraph #ac7
    
#ac4 ,! capac;y 9 : a p]son or "pn]%ip
  rcvs a loan or o!rwise 9curs a debt is
  significant 2c t capac;y det]m9es :e!r
  any b5efit is 6be -put$ "u subsec;n
  #hj.d7#a7 z a result ( an (fice or
  employ;t 7see #a abv7 or "u subsec;n
  #hj.d7#b7 z a result ( %>ehold+s 7see
  #f abv74 ,if a p]son is bo? an
  employee &a %>ehold]1 x is alw a "q (
  fact :e!r a "picul> 9debt$;s >ose z a
  result (! p]son's %>ehold+s or z a
  result (! (fice or employ;t4 ,":
  subsec;n #hj.d7#a7 applies1 ! b5efit
  is alw tax$ 9 ! h&s (! employee ev5 if
  "s ?ird "py1 s* z ! employee's sp\se1
  is ! actual debtor or recipi5t (!
  loan4 ,on ! o!r h&1 b5efits >is+
  pursuant 6subsec;n #hj.d7#b7 >e tax$ 9
  ! h&s (! actual debtor4


                                     #ba
      ,p]sons f :om ,a3.ts >e ,[+    c#h
         & 6:om ,a3.ts >e ,due
             7p>agraph #ad7
    
#ad4 ,": a %>ehold] or employee [es m"oy
  6a corpor,n1 a b5efit may 2 calculat$
  dur+ ! "t ! debt is \t/&+4 ,g5],y1 no
  nett+ or (fsett+ ( any a3.ts 8due to0
  or 8due f0 ! %>ehold] or employee w 2
  deem$
--------------------------------------#i
  or 3sid]$ 6h tak5 place s z 6elim9ate
  ! calcul,n (a b5efit dur+ a "picul>
  p]iod4 ,x w only 2 af ! actual c.ell,n
  (! liabil;y 0a pay;t or 0an adju/;t 9
  ! a3.t+ records t s* am.t w no l;g] 2
  subject 6! calcul,n (a b5efit "u sec;n
  #hj.d4

       ,loans ,repd ,2f ,borr[]'s
        ,ye>-,5d 7p>agraph #ae7
    
#ae4 ,"! is no require;t t a loan 2
  \t/&+ at ! 5d (a borr[]'s tax,n ye> 2f
  a deem$ b5efit "u sec;n #hj.d c    #bb
             ,,it-#dba;,r#b          a#i
  >ise 9 respect ( t ye>4 ,loans or
  debts t >e \t/&+ dur+ only "p (a
  taxpay]'s tax,n ye> c give rise 6a
  b5efit pursuant 6sec;n #hj.d = t por;n
  (! ye> t ! loan or debt is \t/&+4

       ,travel ,adv.es & ,m]*&ise
      ,a3.t ,bal.es 7p>agraph #af7
    
#af4 ,r1sona# travel adv.es 6an employee
  7= travel on 2half (! employ]7 w n
  result 9 an 9t]e/ b5efit 6! employee4
  ,simil>ly1 m]*&ise a3.t bal.es t an
  employee has )! employ] w n give rise
  6any 9t]e/ b5efit provid$ !y >e pd )9
  ! "t limits norm,y all[$ 0! employ]
  6cu/om]s 9 respect ( 9t]e/-free a3.ts4






                                     #bc
       ,limit on ,taxa# ,b5efit f    b#i
     ,home ,pur*ase ,loans & ,home
       ,reloc,n ,loans 7p>agraphs
                #ag-ah7
    
#ag4 ,subsec;n #hj.d7#d7 e/abli%es a
  ceil+ on ! am.t (! b5efit applica# 6a
  8home pur*ase loan01 or 6a 8home
  reloc,n loan04 ,? subsec;n provides t
  ! 9t]e/ calculat$ on s* a loan "u
  p>agraph #hj.d7#a77a7 m/ n exce$ !
  am.t det]m9$ 0us+ ! prescrib$ rate (
  9t]e/ 9 e6ect at ! "t ! loan 0 rcvd or
  ! debt 9curr$4 ,subject 6#ah 2l1 ?
  gives ! taxpay] a gu>antee t ! b5efit
  calculat$ "u subsec;n #hj.d7#a7 w n
  9cr1se 2c ! prescrib$ rate =a
  subsequ5t p]iod 9cr1ses4 ,! taxpay] is
  al all[$ ! b5efit ( any l[] rate if !
  prescrib$ rate lat] decr1ses 2l !
  prescrib$ rate 9 e6ect at ! "t ! loan
  0 rcvd or ! debt 9curr$4 ,a p]son or
  "pn]%ip is 3sid]$ 6h rcvd a loan or
  9curr$ a debt :5 ! funds >e adv.ed or
  ! relevant docu;ts >e execut$ &!   #bd
             ,,it-#dba;,r#b          c#i
  p]son or "pn]%ip 2comes leg,y obligat$
  6repay ! loan or 4*>ge ! debt4
-------------------------------------#aj
#ah4 ,=! purposes ( calculat+ ! b5efit
  on a home pur*ase loan1 or a home
  reloc,n loan1 ! 9t]e/ rate ceil+
  describ$ 9 #ag abv is fix$ = p]iods (
  up 6five ye>s4 ,if ! loan has a
  repay;t t]m exce$+ five ye>s1 subsec;n
  #hj.d7#f7 provides t any bal.e \t/&+
  on s* a loan is deem$ 6be a new home
  pur*ase loan rcvd on ! date t is five
  ye>s f ! "d on : ! loan 0 rcvd & on
  ea* five-ye> anniv]s>y "!af :ile !
  loan is \t/&+4 ,x %d 2 not$1 h["e1 t !
  provi.ns ( subsec;n #hj.d7#f7 d n
  apply 6ei a home pur*ase loan or a
  home reloc,n loan : meets ! 3di;ns 9
  p>agraph #hj.d7#c77a7 7see #aj abv74
  ,z an example1 if a #be-ye> mortgage
  loan 0 grant$ 6an employee at ! m>ket
  rate prevail+ = #be-ye> mortgages )
  simil> 3di;ns at ! "t ( receipt1 ?
  loan w n 2 subject 6! five-ye>     #be
             ,,it-#dba;,r#b         a#aj
  deem+ rule 2c (! exemp;n 3ta9$ 9
  subsec;n #hj.d7#f7 = loans describ$ 9
  p>agraph #hj.d7#c77a74 ,9 ? situ,n !
  loan w 3t9ue 6be exclud$ f any b5efit
  calcul,n "u sec;n #hj.d until !
  expir,n ( xs #be-ye> t]m4 ,a dem& loan
  9 respect ( : a dem& = full pay;t has
  n be5 made )9 five ye>s ( xs -m;e;t is
  3sid]$ 6h a t]m = repay;t exce$+ five
  ye>s4

     ,m1n+ ( 8,home ,pur*ase ,loan0
             7p>agraph #ai7
    
#ai4 ,! t]m 8home pur*ase loan0 is def9$
  9 p>agraph #hj.d7#g77a74 ,an 9dividual
  is 3sid]$ 6h rcvd a home pur*ase loan
  if he or %e rcvd a loan or 9curr$ a
  debt 9 ! circum/.es describ$ 9
  subsec;n #hj.d7#a7 & any por;n ( t
  loan or debt 0 us$ 6acquire1 or 6repay
  a loan or debt t _h be5 9curr$
  6acquire1 a dwell+ =! habit,n ( "o (!
  p describ$ 2l3                     #bf
             ,,it-#dba;,r#b         b#aj
  7a7 ! 9dividual 0virtue ( ^: (fice or
    employ;t ! loan 0 made or ! 9debt$;s
    0 9curr$1
  7b7 a specifi$ %>ehold]1 z def9$ 9
    subsec;n #bdh7#a71 (! corpor,n ^:
    s]vices 7 ! r1son =! loan 2+ made or
    ! debt 2+ 9curr$1 or
  7c7 a p]son relat$ 6a p]son describ$ 9
    7a7 or 7b7 abv4
  ,? def9i;n ( home pur*ase loan 9cludes
  a loan us$ 6repay a home pur*ase loan1
  &! assump;n ( an exi/+ mortgage ": !
  "uly+ debt wd h qualifi$ z a home
  pur*ase loan if x _h be5 obta9$
  directly r ?an 0assump;n4 ,! ^w
  8dwell+0 9cludes a h\se1 an a"p;t 9 a
  duplex or a"p;t build+1 a 3dom9ium1 a
  cottage1 a mobile home1 a trail] or
-------------------------------------#aa
  a h\seboat4 ,= #aihe & lat] ye>s1 !
  def9i;n ( 8home pur*ase loan0 al
  9cludes loans 6acquire a %>e (!
  capital /ock (a coop]ative h\s+
  corpor,n4 ,6qualify1 ! %>e m/ 2    #bg
             ,,it-#dba;,r#b         a#aa
  acquir$ =! sole purpose ( 5titl+ !
  pur*as] (! %>e or a relat$ p]son
  69habit a dwell+ [n$ 0! coop]ative
  h\s+ corpor,n4

     ,m1n+ ( 8,home ,reloc,n ,loan0
             7p>agraph #bj7
    
#bj4 ,! t]m 8home reloc,n loan0 is def9$
  9 subsec;n #bdh7#a7 & is a loan t
  satisfies ! foll[+ 3di;ns3
  7a7 ! loan is rcvd 0an 9dividual or 0!
    9dividual's sp\se1 9 ! circum/.es
    describ$ 9 subsec;n #hj.d7#a71 7see
    #a abv71
  7b7 ! 9dividual has -m;ed employ;t at
    a new "w loc,n 9 ,canada af ,may
    #bc1 #aihe &1 = t r1son1 has mov$ f
    a =m] resid;e 7old resid;e7 6ano!r
    resid;e 9 ,canada : "!af w 2 !
    9dividual's ord9>y place ( resid;e
    7new resid;e71
  7c7 ! loan describ$ 9 7a7 is us$
    6acquire ! new resid;e1          #bh
             ,,it-#dba;,r#b         b#aa
  7d7 ! new resid;e is at l1/ #dj
    kilometres clos] 6! new "w loc,n ?an
    ! old resid;e is1 &
  7e7 ! 9dividual designates t loan1 b
    no o!r1 z a home reloc,n loan 9
    respect ( t move4 7,an 9dividual may
    n h m ?an "o home reloc,n loan at a
    "picul> "t47
  ,= #aihe & lat] ye>s1 a 8new resid;e0
  =! purposes (! def9i;n ( 8home reloc,n
  loan0 al 9cludes a %>e (! capital /ock
  (a coop]ative h\s+ corpor,n1 if t %>e
  is acquir$ =! sole purpose ( 5titl+ !
  9dividual 69habit a dwell+ [n$ 0!
  coop]ative h\s+ corpor,n4

     ,deduc;n ( ,b5efit ,) ,respect
         6,home ,reloc,n ,loan
             7p>agraph #ba7
    
#ba4 ,=! #aihe & subsequ5t tax,n ye>s1
  an 9dividual :o has rcvd a home
  reloc,n loan may deduct an am.t
  det]m9$ "u p>agraph #aaj7#a77j7    #bi
             ,,it-#dba;,r#b         c#aa
  9 -put+ taxa# 9come4 ,! am.t : may 2
  deduct$ is ! l1/ (
  7a7 ! am.t t wd h be5 9clud$ 9 9come
    "u sec;n #hj.d 9 ! ye> if t sec;n _h
    appli$ only 9 respect (! home
    reloc,n loan1
-------------------------------------#ab
  7b7 ! am.t ( 9t]e/ =! ye> t wd h be5
    -put$ "u p>agraph #hj.d7#a77a7 7see
    #b7a7 abv7 if ! home reloc,n loan _h
    be5 4#be1jjj & expir$ on ! e>li] (
    7;i7 ! date on : ! home reloc,n loan
      expir$1 &
    7;ii7 ! fif? anniv]s>y (! "d on : !
      home reloc,n loan 0 made1 &
  7c7 ! am.t 9clud$ 9 9come "u sec;n
    #hj.d 9 ! ye>4
  ,z a result1 a deduc;n may 2 made "u
  p>agraph #aaj7#a77j7 =a tax,n ye> 9 :
  a taxpay] 9cludes an am.t 9 9come
  pursuant 6sec;n #hj.d z x appli$ 9
  respect (a home reloc,n loan dur+ ! f/
  five ye>s or s* %ort] p]iod t ! loan 0
  \t/&+4 ,=! purposes ( -put+ !      #cj
             ,,it-#dba;,r#b         a#ab
  deduc;n "u p>agraph #aaj7#a77j71
  subsec;n #aaj7#a.d7 provides t a loan
  us$ 6repay a home reloc,n loan is
  deem$ 6be ! same loan z ! home reloc,n
  loan & 6h be5 made on ! same "d t !
  home reloc,n loan xf 0 made4 ,if a
  home reloc,n loan has a t]m l;g] ?an
  five ye>s1 ! bal.e \t/&+ on ! f/ "d (!
  six? ye> is deem$ 6be a new home
  pur*ase loan =! purposes ( sec;n
  #hj.d4 ,3sequ5tly1 ! b5efit f s* a
  loan w 2 9clud$ 9 ! 9come 9 ! six? &
  su3e$+ ye>s 9 ! same way z a b5efit
  >is+ 9 3nec;n )a home pur*ase loan1 )
  no (f-sett+ deduc;n "u p>agraph
  #aaj7#a77j71 b subject 6! ceil+
  describ$ 9 #ag & #ah abv4

      ,replace;t ( ,home ,reloc,n
         ,loans 7p>agraph #bb7
    
#bb4 ,if1 )9 five ye>s ( reloc,n1 !
  employee sells ! resid;e & acquires a
  new "o1 &! home reloc,n loan       #ca
             ,,it-#dba;,r#b         b#ab
  f9anc+ is c>ri$ ov] 6! new prop]ty or
  replac$ 0! employ]1 ! employee wd 2
  p]mitt$ ! deduc;n "u p>agraph
  #aaj7#a77j7 =! bal.e (! five ye>
  p]iod4 ,! same result wd foll[ if !
  employee *anges employ;t & acquires a
  new loan 6replace ! exi/+ home reloc,n
  loan4 ,! replace;t loan is 3sid]$
  0subsec;n #aaj7#a.d7 6be ! same loan z
  ! orig9al loan4 ,acly1 ! deduc;n f
  9come ea* ye> wd 2 ! l1/ (! ?ree am.ts
  9 p>agraph #aaj7#a77j71 describ$ 9 #ba
  abv1 bas$ on ! am.t (! replace;t loan
  6! ext5t t ! replace;t loan does n
  exce$ ! am.t (! orig9al loan at "t (
  replace;t4
-------------------------------------#ac
     ,9t]e/ ,rebates 7p>agraph #bc7
    
#bc4 ,an 9dividual may 2come 5titl$ 6an
  9t]e/ rebate ^u ! fulfil;t ( c]ta9
  3di;ns or if t 9dividual meets c]ta9
  crit]ia s* z a specifi$ sal>y level or
  l5g? ( s]vice or z ! result ( "s   #cb
             ,,it-#dba;,r#b         a#ac
  o!r agree;t 2t an employee & an
  employ] or a %>ehold] &a corpor,n4 ,9
  ^! circum/.es1 any 9t]e/ rebate rcvd
  0! 9dividual w 2 br"\ 96! recipi5t's
  9come 9 ! ye> rcvd "u ei p>agraph
  #f7#a77a7 or subsec;n #ae7#a7 dep5d+
  ^u ! capac;y 9 : ! am.t 0 rcvd4

      #hj.d ,b5efit ,am.t z ,9t]e/
         ,exp5se 7p>agraph #bd7
    
#bd4 ,0virtue ( sec;n #hj.e any b5efit
  deem$ 6h be5 rcvd pursuant 6sec;n
  #hj.d 9 a tax,n ye> by
  7a7 an 9dividual or corpor,n pursuant
    6subsec;n #hj.d7#a71 or
  7b7 a p]son or "pn]%ip 9 a3ord.e )
    subsec;n #hj.d7#b71
  w 2 deem$ 6be 9t]e/ pd 9 ! ye> 0!
  debtor pursuant 6p>agraph #bj7#a77c7 &
  subp>agraph #h7#a77j77;i74 ,acly1 !
  am.t may 2 deduct$ 0! debtor if !
  borr[$ m"oy is us$ 0! debtor 6produce
  9come f busi;s or prop]ty4 ,=      #cc
             ,,it-#dba;,r#b         b#ac
  example1 assume t an employee rcvs a
  loan f an employ] : results 9 a b5efit
  "u ! provi.ns ( subsec;n #hj.d7#a7 &!
  loan proce$s >e us$ 6acquire %>es 9 a
  corpor,n4 ,! am.t ( 9t]e/ requir$ 6be
  9clud$ 9 9come z a b5efit calculat$ "u
  subsec;n #hj.d7#a7 is deducti# z 9t]e/
  exp5se pursuant 6p>agraph #bj7#a77c74
  ,": ! debtor is 5titl$ 6deduct exp5ses
  "u ei p>agraph #h7#a77f71 7h7 or
  7h4#a71 ! deem$ b5efit "u sec;n #hj.d
  may 2 deduct$ 0! debtor if ! borr[$
  m"oy is us$ 0! debtor 6acquire a motor
  vehicle t is us$1 or an aircraft t is
  requir$ 6be us$1 9 c>ry+ \ ! duties (
  an (fice or employ;t4

     ,9=m,n ,returns 7p>agraph #be7
    
#be4 ,e p]son or "pn]%ip t 3f]s a sec;n
  #hj.d b5efit on an 9dividual is
  requir$ 0p>agraphs #bjj7#b77g7 & 7i7
  (! ,regul,ns 6file an 9=m,n return on
  ! au?oriz$ =m 7=m ,t#d-,t#d;,a74   #cd
             ,,it-#dba;,r#b         c#ac
  ,! am.ts 6be report$ on ^! =ms >e
  describ$ 9 ! 8,employ]s' ,guide
  6,payroll ,deduc;ns0 : may 2 obta9$ f
  any 4trict tax,n (fice4 ,": an employ]
  grants a loan 6two employees jo9tly1
  norm,y ! deem$ b5efit is 6be report$
  on a #ej-ej basis4
-------------------------------------#ad
     ,non-,resid5ts 7p>agraph #bf7
    
#bf4 ,non-resid5t tax "u subsec;n
  #bab7#b7 may 2 applica# ": a corpor,n
  resid5t 9 ,canada grants a loan 6a
  %>ehold]1 or 6any o!r p]son or "pn]%ip
  describ$ 9 subsec;n #hj.d7#b74 ,9 s*
  cases1 any b5efit deem$ 6h be5 rcvd "u
  subsec;n #hj.d7#b7 : wd ord9>ily 2
  9clud$ 9 ! recipi5t's 9come =! ye> "u
  subsec;n #ae7#i7 if ! recipi5t 7
  resid5t 9 ,canada1 w1 0virtue (
  p>agraph #bad7#c77a71 2 subject 6non-
  resid5t tax "u subsec;n #bab7#b7 = any
  tax,n ye> 9 : ! recipi5t is a non-
  resid5t4 ,": a non-resid5t (       #ce
             ,,it-#dba;,r#b         a#ad
  ,canada is employ$ 9 ,canada1 or 0
  previ\sly employ$ 9 ,canada1 & any
  p]son or "pn]%ip rcvd a loan or
  o!rwise 9curr$ a debt 0virtue ( t
  employ;t1 any b5efit deem$ rcvd
  pursuant 6subsec;n #hj.d7#a7 is 9clud$
  9 -put+ ! non-resid5t's taxa# 9come
  e>n$ 9 ,canada 0virtue ( subsec;ns
  #b7#c71 #f7#i7 & #aae7#a74














                                     #cf