Income Tax Severed Letters - 1997-05-30

Ruling

30 November 1996 Ruling 9708013 - FOREIGN PROPERTY, POOLED FUND TRUST

Unedited CRA Tags
104(2)

Principal Issues:

Will subsection 104(2) apply where a pooled fund trust that currently invests only in Canadian property if it acquires foreign property within the allowed limits?

Position:

No

Reasons:

30 November 1996 Ruling 9641733 - EMPLOYER TOP-UP OF RPP ACCOUNT

Unedited CRA Tags
146.2(1) 6 9

Principal Issues:

1)Whether payments in respect of loss caused by bad investment by pension plan administrator can be used to top-up pension accounts of members without immediate tax consequences to members (including payer's liability for withholding);

2)whether such payments are deductible to employer; and

3)whether recovery from XXXXXXXXXX of over-payment to RPP because actual loss less than estimated loss at time of payment is income to employer.

Position:

1)Yes a) not a contribution to RPP under 147.2(1), b) not a contribution as described in Reg. 8301(4)(a)(i) or (ii), c) and no withholding required;

2)Yes;

3)Yes.

Reasons:

30 November 1996 Ruling 9701523 - REDUCTION IN PUC OF PUBLIC CORP

Unedited CRA Tags
84(2) 84(4.1)

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.

XXXXXXXXXX							3-970152
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1997

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling Request

30 November 1996 Ruling 9704183 F - UTILISATION DE PERTES

Unedited CRA Tags
20(1)(c)

Principales Questions:

Consolidation de pertes
Est-ce que l'intérêt sur un prêt par une filiale à la société mère déductible pour cette dernière?

Position Adoptée:

30 November 1996 Ruling 9703463 - GROUP LOSS UTILIZATION SCHEME

Unedited CRA Tags
20(1)(c)

Principal Issues: N/A supplementary to 963676

Position: n/a

Reasons: n/a

30 November 1996 Ruling 9704273 - DEFERRED DIRECTOR'S FEES 6801(D)

Unedited CRA Tags
6801(d)

Principal Issues:

Will 6801(d) apply where a director elects to receive part or all of his or her fee entitlements in deferred share units?

Position:

Yes

Reasons:

30 November 1996 Ruling 9633813 - Dissolution partnership tiered partnership arrangement

Unedited CRA Tags
98(5) 88(1) 87(11)

Principal Issues:
1. Will subsection 98(5) apply in respect of the dissolution of the XXXXXXXXXX Partnership?

2. Do we have a policy concern regarding the recently completed transactions and the manner in which a bump in the ACB of partnership interests in the XXXXXXXXXX Partnership were attained (i.e. instead of having XXXXXXXXXX buy the shares of the old partner (XXXXXXXXXX) directly, XXXXXXXXXX incorporated newco ("XXXXXXXXXX") to purchase the shares of XXXXXXXXXX and then amalgamated XXXXXXXXXX to form XXXXXXXXXX as the new partner of the XXXXXXXXXX Partnership)?

Position:

1. Yes.

2. No policy concerns.

Reasons:

30 November 1996 Ruling 9705483 - DISSOLUTION OF PARTNERSHIP IN A TIERED ARRANGEMENT

Unedited CRA Tags
98(5)

Principal Issues:
1. Will minor amendment to the proposed transactions alter the ruling given?

Position:
1. No.

Reasons:

30 November 1996 Ruling 9635813 - DEDUCTIBILITY OF SELLING COMMISSIONS OVER 3 YEARS

Unedited CRA Tags
9 18.1

Principal Issues:

1.Whether the selling expenses and redemption charges paid by the partnership XXXXXXXXXX in return for a right for future income stream in respect of distributing XXXXXXXXXX mutual fund units on a rear-end loading basis, would be deductible by the partnership over three years on a straight line basis.

2.Whether the proposed transactions would meet the requirements of the grandfather provisions as stated in the Department of Finance Press Release #96-099 dated December 19, 1996 (if such requirements are not met, the 3-year write-off would not be available to the partnership).

PositionS:

1.The selling expenses and redemption charges are deductible by the partnership over three years on a straight line basis.

2.The proposed transactions will meet the requirements of the grandfather provisions except the XXXXXXXXXX which will be distributed by the same partnership.

Reasons:

30 November 1995 Ruling 9636763 - RELATED GROUP LOSS UTILIZATION SCHEME

Unedited CRA Tags
20(1)(c)

Principal Issues:

interest deductibility

Position:

yes

Reasons:

30 November 1995 Ruling 9615893 F - UTILISATION DE PERTES

Unedited CRA Tags
12(1)(c) 15(1) 56(2) 245(2)

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 3-961589

A l'attention de XXXXXXXXXX

Le XXXXXXXXXX 1996,

Monsieur,

Objet: Demande de décisions anticipées en matière d'impôt sur le revenu
XXXXXXXXXX

30 November 1995 Ruling 9616813 F - DÉMANTELEMENT STRUCTURE UTILISATION PERTES

Unedited CRA Tags
245(2)

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							3-961681
XXXXXXXXXX

A l'attention de XXXXXXXXXX

Le XXXXXXXXXX 1996,

Monsieur,

Objet: Demande de décisions anticipées en matière d'impôt sur le revenu
XXXXXXXXXX

30 November 1995 Ruling 9620363 - DISTRESS PREFERRED SHARES

Unedited CRA Tags
248(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.

XXXXXXXXXX							3-962036
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear XXXXXXXXXX:

Re: XXXXXXXXXX

This is in reply to the XXXXXXXXXX advance income tax ruling request submitted on behalf of XXXXXXXXXX.

30 November 1995 Ruling 9632963 - DISTRESS PREFERRED SHARES - AMENDMENT RULING

Unedited CRA Tags
248(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.

XXXXXXXXXX							1-963296
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1996

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling 962036 (the "Ruling")

Technical Interpretation - External

23 May 1997 External T.I. 9624315 - EMPLOYEE-FUNDED 401(K) PLAN

Unedited CRA Tags
56(2) 75(2) 6(13) ART 18 94(1)

Principal Issues:

1) whether amounts deferred under 401(k) plan (employee contributions only) are taxable when employee becomes resident of Canada and contributes while resident and working in Canada;
2) whether earnings taxable under 94 and 94.1.

Position:

Assuming 401(k) feature is not part of a plan to which employer contributions are made, then
1) the amount may be a subsection 5(1) amount by virtue of subsection 56(2) or constructive receipt or, failing this, a "deferred amount" under a salary deferral arrangement.
2) yes unless exceptions apply.

Reasons:

21 May 1997 External T.I. 9707955 - FAPI - GROSS REVENUE

Unedited CRA Tags
95(2)(a.3) 95(2.4)

Principal Issues:

1)Is the "gross revenue" from indebtedness, where subsection 95(2.4) of the Act applies, excluded from the 90% gross revenue test in paragraph 95(2)(a.3) of the Act?
2)Does "gross revenue" from the sale of indebtedness include the full proceeds of disposition ("POD") received on the sale or only the "spread" (i.e., gross profit)?

Position:

1)No
2)POD

Reasons:

20 May 1997 External T.I. 9711405 - TERMINAL LOSS

Unedited CRA Tags
20(16)

Principal Issues:

will terminal loss apply to rental business?

Position:

yes

Reasons:

20 May 1997 External T.I. 9711045 - DEATH BENIFIT CPP

Unedited CRA Tags
6

Principal Issues:

Can death Benefit from CPP\QPP be reported by recipient or must it be reported by estate?

Position:

Option to be reported by either recipient or estate.

Reasons:

15 May 1997 External T.I. 9710025 - WHETHER "INCORPORATED" IN YEAR AMALGAMATED

Unedited CRA Tags
206(1.1)(d)(i)(A) 206(1.1)(d)(iii)(E)

Principal Issues:

Whether an amalgamated corporation is "incorporated" in Canada at the time it is amalgamated under the CBCA or Ontario Business Corporations Act for purposes of proposed 206(1.1)(d)(i)(A) or (iii)(E).

Position:

No.

Reasons:

14 May 1997 External T.I. 9605355 - foreign affiliates-meaning group of corporations

Unedited CRA Tags
95(2)(A)(II)(D)(V)

Principal Issues:

When is interest "relevant in computing the liability for income taxes...of a group of corporations" for the purposes of 95(2)(a)(ii)(D)(V).

Position:

Such would be the case where a group of corporations combine their results of operations for taxation year under the tax laws of a foreign country and the interest paid by the second affiliate reduces the combined results otherwise determined.

Reasons:

13 May 1997 External T.I. 9631815 - EXPENSE ALLOWANCE

Unedited CRA Tags
81(3)

Principal Issues:

how to determine the exempt portion of a municipal officer's allowance

Position:

comments in IT-292 followed. Letter explains which allowances to include when determining exempt portion

Reasons:

12 May 1997 External T.I. 9710655 - RETIREMENT, DEFER VACATION PAY

Unedited CRA Tags
248

Principal Issues:

Can accrued vacation pay due to be paid on retirement be deferred until a subsequent taxation year?

Position:

No

Reasons:

12 May 1997 External T.I. 9707945 - PERSONAL SERVICES BUSINESS

Unedited CRA Tags
125(7)

Principal Issues:

Principal services business ?

Position:

Question of fact

Reasons:

12 May 1997 External T.I. 9705135 - CHANGE IN USE OF CAPITAL PROPERTY TO INVENTORY

Unedited CRA Tags
13(21) 54 85

Principal Issues:

Does a requested rezoning change result in a change in use and can the proerty be transferred under section 85 deferring the can on the ultimate sale to the sisterco.

Position:

A question of fact however a zoning change is not a disposition and results in a notational disposition on the date of conversion. A section 85 rollover is a disposition to which the notational increase is relevant.

Reasons:

12 May 1997 External T.I. 9637015 F - REVENU GAGNÉ - PÉRIODE DE CALCUL

Unedited CRA Tags
55(2)

Principales Questions:

période de calcul du revenu gagné

Position Adoptée: selon libellé de la Loi

12 May 1997 External T.I. 9706435 - CAPITAL GAIN VS INTEREST INCOME ON DISPOSITION OF A BOND

Unedited CRA Tags
85(4)

Principal Issues:

Whether there is a capital loss on disposition of bond to controlled corporation and whether on the subsequent disposition by the corporation it is income or capital.

Position:

As the transaction occurred prior to April 26, 1995 subsection 85(4) applies and it is a question of fact whether the gain is on account of income or capital

Reasons:

12 May 1997 External T.I. 9711165 - R/A, EMPLOYER SOLD, REHIRED BY NEW SUB

Unedited CRA Tags
248(1) 60(j.1)

Principal Issues:

Can an employee receive a retiring allowance from a subsidiary that has been sold where the employee will be hired by a newly incorporated subsidiary immediately after the sale?

Position:

No

Reasons:

9 May 1997 External T.I. 9702805 - TERMINAL LOSSES

Unedited CRA Tags
20(16)

Principal Issues:

An individual may purchase land with a leased building on it. A short time following the purchase, the building may be torn down. The issue is whether a terminal loss can be claimed in respect of the demolished building.

Position:

Likely not

Reasons:

8 May 1997 External T.I. 9711445 - PRIVATE COMPANY SHARES IN RRSP

Unedited CRA Tags
REG 4900(6) REG 4900(12)

Principal Issues:

Investment in a business corporation as a qualified investment for an RRSP

Position:

Discussion of 4900(6) and (12) (no discussion of transitional rules with respect to property acquired between Dec. 2/92 and November 29/94).

Reasons: N/A

8 May 1997 External T.I. 9704905 - LEASE CANCELLATION PAYMENTS FOR AUTOS

Unedited CRA Tags
8(1)(h.1)

Principal Issues:

Are lease cancellation payments deductible under 8(1)(h.1)?

Position:

No

Reasons:

8 May 1997 External T.I. 9636045 - PENSION CORPORATIONS

Unedited CRA Tags
149(1)(o.2)(iii)(c)

Principal Issues:

1.Is the reference to "income" in clause 149(1)(0.2)(iii)(C) intended as a reference to "net income"?
2.Where a corporation participates in a mortgage loan or originates a mortgage loan for which it receives inducement payments, loan fees or commitment fees, will such income be considered "income from investments" for the purposes of the income test in clause 149(1)(o.2)(iii)(C)?

Position:

1.Yes.
2.Factual determination. If the payments or fees can be directly traced to a particular investment, such amounts would generally constitute income from investments for the purposes of the income test in clause 149(1)(o.2)(iii)(C).

Reasons:

7 May 1997 External T.I. 9710635 - RESP QUALIFIED INVESTMENT

Unedited CRA Tags
146.1

Principal Issues:

Is an RESP restricted to acquiring property that qualifies as a qualified investment under subsection 146(1) of the Act?

Position:

No

Reasons:

7 May 1997 External T.I. 9636515 - NON-PROFIT HOUSING

Unedited CRA Tags
149(1)(l) 149(12) 149(1)(n)

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.

							963651
XXXXXXXXXX						B. Kerr

Attention: XXXXXXXXXX

May 7, 1997

Dear Sirs:

Re: Non-profit Housing Co-operatives

This is in response to your letters of May 29, October 24, and December 16, 1996, concerning non-profit housing co-operatives.

6 May 1997 External T.I. 9621235 F - MODIFIÉ ET TARDIF

Unedited CRA Tags
110.6(19) 110.6(26) 110.6(29)

Principales Questions:

Si Monsieur X a fait un choix selon le paragraphe 110.6(19) de la Loi à l'égard de la totalité du bien alors que seulement 50% du bien lui appartient et que l'autre 50% appartient à Madame X, est-ce que :

1. Monsieur X peut modifier son choix initial même si le montant indiqué dans son choix initial excède, en théorie, 11/10 de la juste valeur marchande du bien qui lui appartient réellement.

2. Madame X peut faire un choix tardif sans pénalité sur sa part du bien.

Position Adoptée:

6 May 1997 External T.I. 9629915 F - DÉCLARATION FIDUCIE ET APPLICATION

Unedited CRA Tags
150(1) REG 204 67.3

Principales Questions:

1. Est-ce qu'une fiducie créée dans le seul but de détenir une résidence familiale ou d'autres biens non productifs de revenu est tenue de produire une déclaration en vertu de l'article 150 de la Loi?

2. Est-ce qu'une entreprise qui loue régulièrement des voitures de tourisme à court terme (1 à 3 jours) est visée par les limites prévues à l'article 67.3 de la Loi?

Position Adoptée:

5 May 1997 External T.I. 9705355 - MEDICAL EXPENSES

Unedited CRA Tags
118.2(2)

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.

		  					970535
XXXXXXXXXX					  B.Kerr

Attention: XXXXXXXXXX

May 5, 1997

Dears Sirs:

Re: Eligible Expenses Under Subsection 118.2(2)

2 May 1997 External T.I. 9530755 - CANADA-U.S. SOCIAL SECURITY AGREEMENT

Unedited CRA Tags
N/A

Principal Issues:

Will the Department accept an application for CPP coverage pursuant to subparagraph 2(a) of Article V of the Canada-U.S. Social Security Agreement where the period of work outside Canada is intended to be on a permanent basis once the employee receives his permanent residence status (i.e. green card) in the United States?

Position:

Technically no. However, the competent authorities can make exceptions.

Reasons:

2 May 1997 External T.I. 9708215 - INTERACTION OF 15(1) AND 86(2)

Unedited CRA Tags
15(1) 86(2)

Principal Issues:

Whether subsection 15(1) of the Act would apply in a situation where the capital of a wholly-owned subsidiary is reorganized under section 86 in a manner such that the provisions of subsection 86(2) does not apply because of the exception with respect to "wholly-owned subsidiaries".

Position:

NO.

Reasons:

2 May 1997 External T.I. 9710015 - BANKRUPTCY, HOME BUYERS PLAN

Unedited CRA Tags
146.01

Principal Issues:

Will we change our position that the unpaid portion of the home buyers' plan withdrawal is not a debt for purposes of the bankruptcy laws?

Position:

No

Reasons:

1 May 1997 External T.I. 9639985 - SECTION 3860 OF THE CICA HANDBOOK

Unedited CRA Tags
15(1) 86(2)

Principal Issues:

Due to the new accounting rules on financial instruments contained in section 3860 of the CICA Handbook, will the removal of the retraction feature of the preferred share cause any tax consequences.

Position:

Yes.

Reasons:

30 April 1997 External T.I. 9707525 - INTEREST EXPENSE IN A PARTNERSHIP

Unedited CRA Tags
20(1)(c) 96

Principal Issues:

Deductibility of interest expense in a proprietorship where equity account is in a deficit position

Position:

Question of tracing borrowing to an eligible use

Reasons:

30 April 1997 External T.I. 9706405 - U.K. NATIONAL INSURANCE BENEFITS

Unedited CRA Tags
6(1)(g)(iii) 60(t) 56(1)(a)(i)

Principal Issues:

Why is pension income from foreign plan taxable when contributions to plan were not tax-deductible.

Position:

Assuming the U.K. National Insurance is a "pension plan" to which employer contributions were made, it is an EBP or, after 1987 (assuming no material alterations between Oct. 8, 1986 and Dec. 31, 1987), a "resident's arrangement" RCA; alternatively, it is a social security arrangement. Contributions by Canadian-resident employee to any of these arrangements are not tax-deductible. The return of contributions from an EBP or RCA is, respectively, exempt from taxation under 6(1)(g)(ii) or deductible under paragraph 60(t); the return of contributions from a social security arrangement are taxable in full as "pension" pursuant to Article 17 of Canada-U.K. Treaty and paragraph 56(1)(a)(i) of the Act.

Reasons:

29 April 1997 External T.I. 9710715 - PROFESSIONAL DUES PAID BY EMPLOYER AND 8(1)(I)

Unedited CRA Tags
8(1)(I)(I) 6(1)(A)

Principal Issues:

whether an employee can get an 8(1)(i)(i) deduction for professional membership dues when the dues have been paid by the employer but included in the employee's income as a taxable benefit

Position:

yes

Reasons:

24 April 1997 External T.I. 9701795 - CAPITAL LOSS IN THE YEAR OF DEATH

Unedited CRA Tags
111(2) 110.6

Principal Issues:

Does capital loss in year of death apply against other income for any year?

Position:

No, Applies only to year of death and immediately preceding year

Reasons:

22 April 1997 External T.I. 9702295 - CHARITABLE DONATIONS AND 56(2)

Unedited CRA Tags
56(2) 110.1

Principal Issues:

Is 56(2) applicable to a bona-fide gift ?

Position:

Not generally, however it remains a question of fact.

Reasons:

20 April 1997 External T.I. 9711155 - 55(3)(A)(I) EXEMPTIONS

Unedited CRA Tags
55(3)(a)(i)

Principal Issues:

Application of proposed amendments in Bill C-69

(1) Whether disposition of property to be exempted under 55(3)(a)(i) has to meet description of both clauses (A) and (B) of 55(3)(a)(i).

(2) Whether redemption of shares for fmv would meet the description of one of clauses (A) or (B) of 55(3)(a)(i).

Position:

(1) No. (2) Yes.

Reasons:

16 April 1997 External T.I. 9635995 - SH-BENFITS-LEASEHOLD IMPROVMENTS

Unedited CRA Tags
15(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.

								963599
XXXXXXXXXX						B.Kerr

Attention: XXXXXXXXXX

April 16, 1997

Dear Sirs:

Re: Subsection 15(1)

16 April 1997 External T.I. 9703245 - DEDUCT SALARY IF NOT INSURED UNDER EI ACT?

Unedited CRA Tags
9 18(1)(A)

Principal Issues:

whether salary paid to spouse is deductible if the salary amount is not insurable under the Employment Insurance Act

Position:

section 67 will operate to disallow any portion of the salary which is not reasonable in the circumstances

Reasons:

14 April 1997 External T.I. 9703655 - INTEREST INCOME

Unedited CRA Tags
81 12

Principal Issues: interest income - Indian

Position:earned in ecomomic mainstream

Reasons:position established in Glenn Williams

10 April 1997 External T.I. 9700905 - IT-346R

Unedited CRA Tags
9

Principal Issues:

IT-346R and the reporting method with respect to commodity trading.

Position:

The taxpayer will be permitted to change his method of reporting his commodity results from the capital basis to the income basis. However, after making such a change he must then report on that basis for subsequent years.

Reasons:

10 April 1997 External T.I. 9701915 - INCOME FROM AN ACTIVE BUSINESS

Unedited CRA Tags
9 248(1)

Principal Issues:

Cessation of Business

Position:

The determination of whether a corporation is a specified investment business can only be determined after a review of all the facts. However, generally when the nature of a business has changed to one of investment activity only, it would generally fit the definition of a specified investment business.

Reasons:

9 April 1997 External T.I. 9621655 - NPO FUNDRAISING

Unedited CRA Tags
149(1)(l)

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.

			962165
XXXXXXXXXX			B. Kerr

Attention: XXXXXXXXXX

April 9, 1997

Dear Sirs:

Re: Fund Raising for a Non-Profit Organization

8 April 1997 External T.I. 9700925 - PRINCIPAL RESIDENCE AND TRANSFER OF PROPERTY

Unedited CRA Tags
54 56(4.1) 74.1(2)

Principal Issues:

1 - Do the principal residence rules apply on death of an individual.
2 - Do attribution rules apply to a loan or gift of money to an adult child.

Position:

1 - They do
2 - They do not if it is an outright gift and they may if it is a loan.

Reasons:

20 March 1997 External T.I. 9706775 - PRINCIPAL RESIDENCE

Unedited CRA Tags
54

Principal Issues:

Whether the shares in a corporation incorporated under other than "cooperative legislation" can qualify as a principal residence.

Position:

Must be incorporated under cooperative legislation.

Reasons:

28 November 1996 External T.I. 9639105 - REPLACEMENT PROPERTY

Unedited CRA Tags
13(4.1(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.

TAX EXECUTIVE INSTITUTE

December 10, 1996

Question No. XlV.

REPLACEMENT PROPERTY

Conference

13 February 1997 CTF Roundtable Q. 1, 9621950 - 1996 ONTARIO TAX CONFERENCE - QS & AS

Unedited CRA Tags
212(1)(d) 55(2) 55(3) 112(3.2)

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.

1996 ONTARIO TAX CONFERENCE

OCTOBER 8, 1996

COMPUTER SOFTWARE PAYMENTS TO RESIDENTS OF THE U.S. AND THE NETHERLANDS

Technical Interpretation - Internal

13 May 1997 Internal T.I. 9710997 - T4PS, CAPITAL GAIN EXEMPTION

Unedited CRA Tags
110.6(2.1) 144

Principal Issues:

Can a beneficiary of an EPSP claim the capital gains exemption with respect to gains reported on a T4PS?

Position:

Yes, if conditions satisfied.

Reasons:

29 April 1997 Internal T.I. 9702047 F - PRESTATIONS REÇUES EN VERTU DU PROGRAMME APPORT

Unedited CRA Tags
56(1)u) 110(1)f)

Principales Questions:

Est-ce qu'une prestation reçue en vertu du programme APPORT du gouvernement du Québec doit être incluse dans le revenu net du prestataire, en vertu de 56(1)u)?

Position Adoptée:

29 April 1997 Internal T.I. 9710647 F - SALAIRE VERSÉ AU CONJOINT

Unedited CRA Tags
18(1)a)

Principales Questions:

1- Le salaire XXXXXXXXXX, verse à son conjoint est-il déductible dans le cas où le conjoint occupe des fonctions de relations publiques et de soutien du travail XXXXXXXXXX?

2- Si le salaire versé au conjoint est non déductible pour le payeur, devient-il non imposable pour le conjoint?

Position Adoptée:

17 April 1997 Internal T.I. 9624407 F - PENSION ALIMENTAIRE SUBROGATION DE DROITS

Unedited CRA Tags
60 b) 60 c) 56(1)(b) 56(1)(c)

Position Adoptée:

17 April 1997 Internal T.I. 9641177 - MEDICAL EXPENSES

Unedited CRA Tags
118.2 REGULATION 5700

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.

	                        					April 17, 1997
	Surrey Taxation Centre  		HEADQUARTERS
	Client Services Directorate 	M. Eisner
	Sigrid Hagglund (541-17)		957-8953
                               		964117

Medical Expenses - Computer Equipment

8 April 1997 Internal T.I. 9706197 - INCOME TAX ARREARS

Unedited CRA Tags
56(1)(a)

Principal Issues:

We have been asked whether we have any information concerning an income tax liability. An individual has suggested that the liability is incorrect as a result of a declaration by a former Minister of Revenue Canada. The individual has indicated that the effect of the declaration was that certain pension income was not required to be included in income and that it affected several thousand employees.

Position:

We were unable to provide any information.

Reasons:

8 April 1997 Internal T.I. 9700607 - MEDICAL EXPENSE - SOCIAL WORKER

Unedited CRA Tags
118.2(2)(a) 118.4(2)(a)

Principal Issues:

Whether payment to a Certified Social Worker in Ontario can be considered as a payment to a medical practitioner.

Position:

No

Reasons:

21 March 1997 Internal T.I. 9705037 F - PENSION ALIMENTAIRE-SUBROGATION DE DROITS

Unedited CRA Tags
ART 56(1)(b) ART 60 (b) ART 56(1)(c) ART 60 (c)

Position Adoptée:

14 March 1997 Internal T.I. 9704656 F - VERSEMENT DES RETENUES D'IMPOT SUR RISTOURNES

Unedited CRA Tags
135(3)

Principales Questions:

Sens de l'expression "remettre immédiatement" (forthwith remit)

Position Adoptée:

14 March 1997 Internal T.I. 9700617 F - REVENU NON DÉCLARÉ - PROVISION A 34.2(4) ET PÉNALITÉ

Unedited CRA Tags
34.2(4) 163(2) 163(2.1)

Principales Questions:

1. Un contribuable qui désire modifier sa déclaration d'impôt pour l'année 1995, a-t-il le droit de réclamer la réserve prévue à 34.2(4) sur ce revenu ajusté?

2. Si une pénalité s'applique selon le paragraphe 163(2) de la Loi, est-elle applicable sur le montant brut du revenu qui n'avait pas été déclaré ou bien sur le revenu net, après déduction de la réserve?

Position Adoptée:

12 March 1997 Internal T.I. 9700807 F - REVENU NON DÉCLARÉ - PROVISION A 34.2 ET PÉNALITÉ

Unedited CRA Tags
34.2(4) 163(2) 163(2.1)

Principales Questions:

1.Doit-on tenir compte du revenu non déclaré pour établir la provision pour le "revenu au 31 décembre 1995" prévue au paragraphe 34.2(4) de la Loi?
2.En tenant compte du paragraphe 163(2.1), peut-on appliquer la pénalité de 163(2) sur un revenu non déclaré de XXXXXXXXXX $?
3.Si on ne peut appliquer la pénalité prévue au paragraphe 163(2) au 31 décembre 1995, peut-on l'appliquer lors des neufs années suivantes?

Position Adoptée:

3 March 1997 Internal T.I. 9700487 - CAPITAL OF A CREDIT UNION

Unedited CRA Tags
181.3(3)

Principal Issues:

1. Is a credit union allowed to use statutory filing financial statements for Part I.3 tax purposes, or must they use the financial statements included in their annual report and prepared in accordance with GAAP for the purpose of Part I.3?

2. For the purpose of Part I.3 what are the proper amounts in respect of the membership shares to be included in the computation of share capital under subsection 181.3(3) of the Act (i.e., are the disputed amounts really deposit liabilities)?

Position:

1. Must use GAAP statements.

2. Question of fact to be determined under the particular credit union legislation. In this case, the facts indicate that the disputed amounts are not legally deposit liabilities under the applicable credit union legislation which was the basis for them being reported as share capital in the GAAP financial statements.

Reasons: See above and our response.

24 February 1997 Internal T.I. 9642327 F - TRAITEMENT FISCAL DES EAUX USEES

Unedited CRA Tags
127(5) CLASS 24 CLASS 29

Principales Questions:

Des biens acquis pour le traitement des eaux usées sont-ils des biens acquis principalement pour la fabrication ou la transformation de marchandises destinées à la vente?

Position Adoptée:

21 February 1997 Internal T.I. 9636526 - INTEREST ON DEFICIT INSTALMENTS

Unedited CRA Tags
156(1)(a)

Principal Issues:

whether client should have been assessed interest and penalties for insufficient instalments

Position:

yes

Reasons:

19 February 1997 Internal T.I. 9704437 F - VERSION FRANÇAISE DU DOCUMENT NO 5-962762

Unedited CRA Tags
81(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.

		Le 19 février 1997
	Services fiscaux de Rouyn-Noranda	Administration centrale
(613) 957-8953
	A l'attention de Monsieur Michel Morel
	                 Directeur
		7-970443

Version française du document no 5-962762

19 November 1996 Internal T.I. 9624387 F - PENSION ALIMENTAIRE-SUBROGATION DES DROITS

Unedited CRA Tags
ART 56(1)(b) ART 60 (b) ART 56(2)

Position Adoptée:

Ministerial Letter

13 May 1997 Ministerial Letter 9710558 - phsp coverage for same sex life partner of an employee

Unedited CRA Tags
6(1)(A)

Principal Issues:

coverage of same sex partners under an employer's health care plan

Position:

coverage does not taint plan's qualification as a phsp

Reasons:

1 May 1997 Ministerial Letter 9707748 - PROFESSIONAL ALLOWANCE FOR UNIVER PROFESSOR

Unedited CRA Tags
6(1)(a)

Principal Issues:
whether an allowance or reimbursement to an employee for either employment related consumable supplies or for durable assets like a computer is included in income

Position:
allowances of both types are included in income but if the amount is a reimbursement of a consumable employment-related supply, it is excluded from income - if it is a reimbursement of a durable good or of a personal expense, it confers a economic benefit and is taxable to the employee under 6(1)(a)

Reasons:
6(1)(b) contains no exclusion for either type of allowance and 6(1)(a) will require the reimbursement of a employee's cost of a durable good to be included in income in that the employee has effectively acquired an asset at a lower cost than s/he would have if the employer had not assisted note that the Dept's response to Huffman was that both an allowance & a reimbursement of special clothing which had no personal value was is excluded from income - the quantum of such allowances, when paid as allowances, is usually such that it is reasonable to assume that the employee likely did spend the full amount of the allowance because it would be unreasonable to expect the employee to spend less - if it is likely that the employee may not spend the full amount of the allowance, then it should be included in income

25 April 1997 Ministerial Letter 9704488 - PERKS TO GOVERNMENT EMPLOYEES

Unedited CRA Tags
6(1)(A)

Principal Issues:

whether elected officials receive perks not available to other taxpayers

Position:

Generally, elected officials are taxed under the same provisions of the Income Tax Act. An allowance or reimbursement of the personal expenses of an officer or employee is a taxable benefit unless the amount is specifically exempted by legislation

Reasons:

9 April 1997 Ministerial Letter 9707048 - CAP ON PHYSIOTHERAPY COSTS UNDER PSHCP

Unedited CRA Tags
118.2(2)

Principal Issues:
to request that the Minister amend the Public Service Health Care Plan (PSHCP) so that the new $500 annual cap on physiotherapy not apply when the therapy is provided to a patient with disabilities after a stroke.

Position:
Revenue Canada's role is limited to ensuring that the plan meets the requirements of the ITA relating to private health services plans. Minister Stewart is an alernate member of Treasury Board but the Honourable marcel Masse will address client's recommendation directly.

Reasons:

16 February 1997 Ministerial Letter 9641038 - POST-DATED CHEQUES

Unedited CRA Tags
76(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.

MINISTER/DEPUTY MINISTER'S OFFICE 96-08358M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER

February 16, 1997

XXXXXXXXXX

Dear XXXXXXXXXX:

27 December 1996 Ministerial Letter 9632688 F - CRÉDIT D'IMPOT - DÉCLARATION SPÉCIALE D'UN DÉCÉDÉ

Unedited CRA Tags
70(2) 118.8

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.

DEPUTY MINISTER'S OFFICE (2)
ASSOCIATE DEPUTY MINISTER (1) 96-0864D
ADM'S OFFICE (3)
PENDING
RETURN TO RULINGS 15TH FLOOR, ALBION TOWER
Le 27 décembre 1996

XXXXXXXXXX

Maître,