[Verse 1] When shareholders receive more than dividends Section fifteen draws the boundary line Personal benefits flow like hidden currency Taxable income that the CRA will find Company pays your mortgage, lease, or rent The shareholder benefit rules take hold Fair market value becomes your burden A story that accountants often told [Chorus] Section fifteen, benefit machine What you receive is what you owe Section fifteen-two, loans pursue Imputed interest starts to grow Bona fide or deemed to be Calculate what equity Section fifteen, benefit machine Track the flow of what you know [Verse 2] Shareholder loans create a ticking clock Two years to repay or face the cost Principal becomes taxable income Borrowed money suddenly is lost But wait, there's more - imputed interest Prescribed rates applied to what remains Even when you pay the principal back The interest benefit still sustains [Chorus] Section fifteen, benefit machine What you receive is what you owe Section fifteen-two, loans pursue Imputed interest starts to grow Bona fide or deemed to be Calculate what equity Section fifteen, benefit machine Track the flow of what you know [Bridge] Bona fide arrangements save the day Commercial terms and reasonable rates Written agreements, proper documentation Exception rules that fortune favors But scrutiny follows every transaction Substance over form will always win The taxman looks beyond the paperwork To see where benefits begin [Verse 3] Housing loans and automobile advances Connected persons can't escape the net Benefit calculations multiply Through relationships you won't forget Low-interest loans below prescribed rates Create a benefit you must report The difference between what should be paid And actual terms become support [Final Chorus] Section fifteen, benefit machine What you receive is what you owe Section fifteen-two, loans pursue Imputed interest starts to grow Bona fide or deemed to be Calculate what equity Section fifteen, benefit machine Now you know which way to go
← Connected Corporations and Part IV Tax | Corporate Loss Carryovers →