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FAPI stands for foreign accrual property income and comes into play when Canadian taxpayers own a foreign corporation that is earning passive income or capital gains. Passive income generally includes income from property such as interest, rent and royalties, income from a business other than an active business, and certain taxable capital gains from the disposition of property. The purpose of FAPI is to the Canadian tax deferral that could result from using offshore holding companies to hold investments.
For more detailed information Contact us for a free consultation regarding your FAPI issues:
UHY Victor LLP Canada U.S. Tax Team