Canco, a Canadian subsidiary of a U.S. parent company (USCo.) loans $300,000 of excess cash to USCo.
Question:
Canco, a Canadian subsidiary of a U.S. parent company (USCo.) loans $300,000 of excess cash to USCo. in its December 31, 2016 taxation year end and does not charge interest.
REQUIRED
(1) Will Canco have a deemed interest income inclusion for the loan if the loan is not elected to be a PLOT? Will 15(2) apply? Assume the loan is repaid on December 15, 2017.
(2) Will Canco have a deemed interest inclusion for the loan if the loan is elected to be a PLOI? Assume the loan is repaid January 15, 2018. Will 15(2) apply?
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1 If the loan is not elected to be treated as a PLOI there will be an income inclusion for Canco for ...View the full answer
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Related Book For 
Introduction To Federal Income Taxation In Canada 2016-2017
ISBN: 9781554968725
37th Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
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