Income Tax Severed Letters - 1996-11-01

Ruling

30 November 1995 Ruling 9608123 - LOSS CONSOLIDATION

Unedited CRA Tags
20(1)(c)
Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c)

Principal Issues:

Loss Consolidation - Is interest on loan from sub to parent (where funds were received by sub from parent upon common share subscription) deductible to parent?

Position:

Yes - subject to usual 20(1)(c) provisos (legal obligation, used to earn income, etc.)

Reasons:

30 November 1995 Ruling 9609483 - FOREIGN AFFILIATE - INCOME FROM ACTIVE BUSINESS

Unedited CRA Tags
95(2)(a)(i) 95(2)(a)(iii) Reg 5907(11.2) Reg 5907(1)(b)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX
XXXXXXXXXX							960948
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling

30 November 1995 Ruling 9609563 - SHORT-TERM PREFERRED SHARES AND TAXABLE PREFERRED SHARES

Unedited CRA Tags
248(1) 191(4) 191(5)
Summary Under
Tax Topics - Income Tax Act - Section 191 - Subsection 191(5)

Principal Issues:

1)XXXXXXXXXX are the shares XXXXXXXXXX short-term preferred shares and taxable preferred shares.
2)If there is a specified amount for purposes of 191(4) is the deemed dividend up to the specified amount considered to be an excluded dividend and an excepted dividend.

Position:

1)Yes they would be short-term preferred shares and taxable preferred shares if the price paid to a shareholder in respect of a share is in excess of the greater of the fair market value of such share at the date the agreement was entered into and the fair market value of such shares at the time of its acquisition
2)Yes provided the specified amount does not exceed the fair market value of the shares immediately before the agreement is entered into.

Reasons: see officer analysis

30 November 1995 Ruling 9616223 - DIVISIVE REORGANIZATION

Unedited CRA Tags
55(3)(b)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX							3-961622
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling

30 November 1995 Ruling 9617493 - ARM'S LENGTH SALE, NIECE IN LAW

Unedited CRA Tags
84.1(1)

Principal Issues:

Whether sale to "niece in law" is at arm's length

Position:

Question of fact. Ruling provided with proviso.

Reasons:

30 November 1995 Ruling 9618513 - BUTTERFLY SUPPLEMENTARY

Unedited CRA Tags
55(3)(b)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX							1-961851

Attention XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling our file No. 3-960806 (the "Ruling")

30 November 1995 Ruling 9600943 - PARA. 149(1)(J) CORPORATION

Unedited CRA Tags
149(1)(j)

Principal Issues:

Qualification of corporation as being constituted exclusively to carry on or promote SR&ED under 149(1)(j) of the Act and qualification of payments made by contributors to the corporation for ITC purposes.

Position:

Rulings provided.

Reasons:

30 November 1995 Ruling 9619803 - SUPPLEMENTAL NON-FUNDED PENSION

Unedited CRA Tags
56(1)(a)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX							961980

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: Advance Income Tax Ruling
XXXXXXXXXX

This is in reply to your letter dated XXXXXXXXXX, wherein you requested an advance income tax ruling on behalf of XXXXXXXXXX.

Technical Interpretation - External

23 October 1996 External T.I. 9608655 - REINSURANCE THROUGH CAPTIVE AND PARAGRAPH 95(2)(A.2)

Unedited CRA Tags
95(2)(a.2) 95(1)

Principal Issues:

In a situation where U.S. individuals pay insurance premiums to a Canadian fronting insurer and a foreign captive insurance company reinsures, is there risk being insured which is in respect of a person resident in Canada so that paragraph 95(2)(a.2) applies?

Position:

No.

Reasons:

17 September 1996 External T.I. 9607685 - TAX TREATMENT OF RRSPS OF STATUS INDIANS

Unedited CRA Tags
81(1)(a) 146(1)

Principal Issues:

16 September 1996 External T.I. 9621065 F - RISTOURNES DE COOPÉRATIVES DE TRAVAILLEURS

Unedited CRA Tags
135 5 78(4) 9 18

Principales Questions:

1. Est-ce qu'une coopérative de travailleurs pourrait déduire la ristourne calculée conformément à l'article 226 de la Loi sur les coopératives dans le calcul de son revenu de l'année d'imposition au cours de laquelle le travail a été effectué en vertu de la Loi de l'impôt sur le revenu (ci-après la Loi)?

2. Est-ce que la coopérative de travailleurs doit calculer les retenues à la source sur les montants versés à ses employés en utilisant les tables d'impôt pour les revenus d'emploi ou en calculant un montant d'impôt égal à 15% des ristournes excédant 100 $, tel que prévu au paragraphe 135(3) de la Loi?

3. Est-ce que le paiement de la ristourne serait assujetti à la Loi sur l'assurance-emploi?

Position Adoptée:

11 September 1996 External T.I. 9609405 - FISCAL PERIOD - BARE TRUST

Unedited CRA Tags
248 249.1
Summary Under
Tax Topics - Income Tax Act - Section 249.1 - Subsection 249.1(1)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

									960940
XXXXXXXXXX							B. Kerr

Attention: XXXXXXXXXX

September 11, 1996

Dear Sir:

Re: Fiscal Period

This is in response to your letter of March 5, 1996, in respect of the new legislation concerning fiscal periods.

29 August 1996 External T.I. 9627965 F - ALLOCATION RETRAITE

Unedited CRA Tags
248(1) 56(1)(a)(i)

Principales Questions:

Est-ce que l'arrangement pour verser des prestations supplémentaires en vertu d'une mesure de départ volontaire est une convention de retraite si les prestations sont payables par le fonds consolidé du revenu d'une province?

Position Adoptée:

27 August 1996 External T.I. 9623235 F - Prêt sans intérêt par le rentier à son RÉER

Unedited CRA Tags
146(4)A) 146(1) 245

Position Adoptée:

22 August 1996 External T.I. 9618525 F - DEPENSES DE MAIN-D'OEUVRE ADMISSIBLE

Unedited CRA Tags
125.4

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

									5-961852
XXXXXXXXXX							Michel Lambert
(613) 957-8953

A l'attention de XXXXXXXXXX

Le 22 août 1996

Mesdames, Messieurs,

Objet: Dépense de main-d'oeuvre admissible
Crédit d'impôt pour productions cinématographiques

13 August 1996 External T.I. 9610435 - INTER VIVOS TRUST, DISPOSITION TO BENEFICIARY

Unedited CRA Tags
107(4.1) 75(2) Reg 4800.1

Principal Issues:

1.Can 107(4.1) apply where 75(2) amount is nominal or person described in 107(4.1)(c) is a corporation?

2.Is a particular trust a personal trust or a prescribed trust (Reg 4800.1)?

Position:

1.Yes.

2.Insufficient information available to make determinations.

Reasons:

12 July 1996 External T.I. 9618785 - 34.2 ADDITIONAL INCOME COMPUTATION

Unedited CRA Tags
34.1 34.2

Principal Issues:

Whether a new partnership with different partners carrying on a similar business is a particular business that is a substituted business for the purposes of section 34.2 when the existing partnership still carries on business but at a reduced level of operations.

Position:

Question of fact.

Reasons:

18 June 1996 External T.I. 9610825 - AMOUNT RECEIVED FOR TERMINATION OF RENTAL GUARANTEE

Unedited CRA Tags
9

Principal Issues:

Whether amount received to terminate a rental revenue guarantee agreement pursuant to which vendor of property guaranteed minimum rent is taxable.

Position:

Amount likely taxable.

Reasons:

Conference

11 June 1996 CTF Roundtable Q. 5, 9620740 - MONEY BORROWED TO REDEEM SHARES

Unedited CRA Tags
20(1)(c) 245(4)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Canadian Tax Foundation
Corporate Management Tax Conference
June 14, 1996

Question 5 - Interest on Funds Borrowed to Redeem Shares

11 June 1996 CTF Roundtable Q. 7, 9620750 - EXCESS DEBT ON ROLLOVER

Unedited CRA Tags
85(1)(b) 20(1)(c)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Canadian Tax Foundation
Corporate Management Tax Conference
June 14, 1996

Question 7 - Rollovers When Boot Exceeds ACB

14 June 1996 CICA Roundtable Q. 1, 6M12570 - 1996CMTC

Unedited CRA Tags
1

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

CANADIAN TAX FOUNDATION

CORPORATE MANAGEMENT TAX CONFERENCE
JUNE 13 - 14, 1996
___________________________________________

REVENUE CANADA FORUM

Question 1 - Interest Deductibility

Technical Interpretation - Internal

11 September 1996 Internal T.I. 9624197 F - PÉNALITÉ ET CII

Unedited CRA Tags
163(2) 127(5)

Principales Questions:

Sur quel montant peut-on appliquer la pénalité prévue au paragraphe 163(2) de la Loi lorsque :

1.On refuse un CII réclamé.

2.On refuse un CII non encore réclamé par le contribuable.

3.On augmente le revenu imposable du contribuable d'un revenu non déclaré, cependant le contribuable demande d'appliquer un CII non réclamé afin d'annuler l'impôt additionnel.

Position Adoptée:

4 September 1996 Internal T.I. 9628476 F - GAIN EN CAPITAL

Unedited CRA Tags
110.6(19)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

13 March 1996 Internal T.I. 9616890 - CALGARY TAX SERVICES ROUND TABLE - QUESTION 25

Unedited CRA Tags
40(3.15) 40(3.1)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

CALGARY TAX SERVICES ROUND TABLE

Question 25

Definition of a excluded interest

5 March 1996 Internal T.I. 9604706 - INTERPRETATION OF 8503(2)(H)(III)

Unedited CRA Tags
REG 8503(2)(h)(iii) REG 8503(1)

Principal Issues:

Interpretation of 8503(2)(h)(iii)

Position:

2 times (contributions and interest)

Reasons: