Nicole would like to gift her shares in a public corporation (the corporation pays dividends every year) to her 5-year-old daughter, Nancy. Nicole also operates her floral business under the name of NN Inc, a Canadian Controlled Private Corporation (CCPC). She would like to hire her 18-year-old son, Andrew, to help manage customer orders and delivery. Andrew plans to work 25 hours per week as he enrolled in the CPA PEP program this summer.  

Required: (300 words maximum)

Referring to the specific rules in the ITA, prepare an analysis to explain the tax consequences of:

1. Transfer of shares as gifts to Nancy
2. Hire her son to work for her
3. Nicole’s husband, Nick, would like to set up a business called Nick Inc (a CCPC). Will Nick Inc qualify for the full Small Business Deduction? Explain.

Answer rating: 100% (QA)

Referring to the specific rules in the ITA prepare an analysis to explain the tax consequences of Transfer of shares as gifts to Nancy The tax ramifications of a share transfer are one of the most sig... View the full answer