Income Tax Severed Letters - 1999-06-25

Miscellaneous

21 June 1999 9833666 F - ENTENTES DE COMMANDITE - FILM

Unedited CRA Tags
12(1)(x) 125.4

Principales Questions:
Est-ce que les montants reçus par XXXXXXXXXX . (ci-après la Société) en vertu de trois ententes de commandite sont des montants d’aide selon la définition de cette expression au paragraphe 125.4(1) de la Loi?

Position Adoptée:
Nous pouvons raisonnablement considérer que les montants reçus en vertu des ententes avec le ministère des relations internationales et le ministère du Patrimoine canadien comme étant des montants visés aux sous-alinéa 12(1)x)(iii) et (iv) de la Loi et de ce fait, des montants d’aide selon la définition du paragraphe 125.4(1) de la Loi.

10 June 1999 9910776 - INTERPRETATION OF "PENSIONABLE SERVICES"

Unedited CRA Tags
8503(3)(c)(iii)(a)

Principal Issues:
1. Can non-worked periods by certain employees be considered as "pensionable services" for the purposes of clause 8503(3)(c)(iii)(A) of the Regulations?
2. Is there an employer/employee relationship in the various situations?

Position:
1. There is a possibility to continue to accrue lifetime retirement benefits that will count as periods of pensionable services during periods of temporary absence as long as the limits applicable to the pension adjustment provided in subsection 147.1(8) (and section 8507 of the Regulations) are respected and as long as there is an employer/employee relationship.
2. Not enough detail to provide an answer.

Reasons:
1. Wording of the Regulations.
2. Question of facts.

24 September 1998 9812566 - CAPITALIZED EXPENSES IN REGULATED INDUSTRY

Unedited CRA Tags
9 18(1)(b)

Principal Issues:
Capitalization of Expenses in the Regulated Natural Gas Transmission and Distribution Industry

Position:
(A) The costs relating to the installation of equipment rented to customers would be current expenses.

(B) The general and administration overhead expenses, which are directly related to the acquisition or construction of fixed assets, would be capitalized for the purposes of the Act.

(C) The general and administration expenses other than those in (B) above would be current expenses.

Reasons:
(A) Given that these costs are regularly incurred in the normal course of the taxpayers' businesses and that they cannot be attributed to the improvement or creation of a capital asset, current-expense treatment provides a more accurate picture of profit.

Ruling

1999 Ruling 990502A - WIND-UP OF A TRUST

Unedited CRA Tags
107(1), 40(1)

Principal Issues: Supplementary ruling-new ruling on subsection 40(1) added.

Position: Ruling E on page 4 of our letter of XXXXXXXXXX, 1999 (3-982447) was extended to include a reference to subsection 40(1) of the Act and confirmation of previous rulings.

Reasons: Consistent with previous ruling and opinion # 9706043, 9506285. Original request not accepted.

1999 Ruling 9829843 F - ACTIF UTILISE PRINCIPALEMENT DANS ENT. ACTIVE

Unedited CRA Tags
110.6(1)c) 248(1)SEPE

Principales Questions:

Est-ce que l'édifice utilisé en partie par la société pour XXXXXXXXXX et en partie pour la location de XXXXXXXXXX constitue en sa totalité un élément d'actif utilisé principalement dans une entreprise que la société exploite activement, principalement au Canada pour les fins de la définition d'"action admissible de petite entreprise" au paragraphe 110.6(1) de la Loi?

Position Adoptée:

1999 Ruling 9830333 F - 110.6(8) ACTIONS CONVERTIBLE, VALEUR RACHAT

Unedited CRA Tags
110.6(8) 110.6

Principales Questions:
Est-ce que le paragraphe 110.6(8) de la Loi s’appliquera lors de la disposition par les contribuables de leurs actions dans Société A pour refuser la déduction pour gains en capital à l’égard d’actions admissibles de petite entreprise si les sociétés n’ont jamais versé de dividendes sur des actions prescrites et non prescrites qu’elles ont émises?

Position Adoptée:
Le Ministère n’appliquera pas le paragraphe 110.6(8) de la Loi dans les situations présentées.

1999 Ruling 9827133 - LOSS CONSOLIDATION

Unedited CRA Tags
20(1)(c)

Principal Issues: Loss and tax credit utilization within a related Canadian corporate group.

Position: OK

Reasons: In this situation it is achieved by way of interest bearing intercompany loan, and PUC reduction and taxable dividends that do not exceed PUC and retained earnings.

1999 Ruling 9827903 - EMPLOYEE SHARE PURCHASE ARRANGEMENT

Unedited CRA Tags
245

Principal Issues: Application of GAAR to set up of Buyco to purchase employees’ shares.

Position: GAAR not applicable

Reasons: Decision of GAAR committee consistent with past rulings practice.

1999 Ruling 9833183 - 56(1)(D)

Unedited CRA Tags
56(1)(d)

Principal Issues:
An individual (the "Claimant") was a passenger in a motor vehicle, which was involved in a single vehicle accident. The Claimant sustained personal injuries as a result of the accident. The Claimant commenced an action against one of the owners and the operator (the “Defendants”) of the vehicle. Pursuant to an out-of-court settlement, the Defendants’ insurer (the “Insurer”) will agree to make periodic payments to the Claimant during the Claimant’s lifetime, and if the Claimant dies within the guarantee period, to the Claimant's estate or named beneficiaries. The obligation to make these payments by the Insurer will be assigned, pursuant to an assignment and assumption agreement, to another casualty insurer who will make the periodic payments to the Claimant. The Claimant will agree to the assignment.

1998 Ruling 9719943 - BUTTERFLY REORGANIZATION

Unedited CRA Tags
55 245 104(5.8)

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.

XXXXXXXXXX
XXXXXXXXXX 		971994
XXXXXXXXXX 

Attention: XXXXXXXXXX

XXXXXXXXXX, 1998

Dear Sirs:

Re: XXXXXXXXXX (“DC”) - XXXXXXXXXX
XXXXXXXXXX (“Family Trust”) - XXXXXXXXXX

1998 Ruling 9730823 - CONSOLIDATION THEN PARTITION

Unedited CRA Tags
248(21) 54 245(2)
multiple co-owned parcels consolidated into one parcel so that s. 238(21) can apply to the subsequent partition

Principal Issues: 1. Whether consolidation of parcels of land into one consolidated parcel a disposition?

2. Whether, partition of consolidated parcel jointly owned into 5 parcels owned in severalty, a disposition?

Position: 1. No.

2. No.

Reasons: 1. No change in beneficial ownership.

1998 Ruling 9826433 - NOTIONAL DEFINED CONTRIBUTION PLAN

Unedited CRA Tags
56(1)(A) 5(1) 6(1)(a)

Principal Issues: Whether an unfunded supplementary retirement arrangement results in current taxation.

Position: No.

Reasons: Investing funds, which are not held in trust and that are available for the general creditors of an employer is not considered to be a taxable event. The arrangement can be regarded as a pension plan and, as such, these pension benefits are taxable when received.

Ministerial Correspondence

27 May 1999 Ministerial Correspondence 9907374 - SIZE OF REPLACEMENT PROPERTY

Unedited CRA Tags
44(5)

Principal Issues: Whether the size of a property affects the determination of whether it qualifies as a replacement property for purposes of section 44.

Position: The Department’s general position is that the replacement property rules do not allow a property that is significantly larger than property it replaces. However, the Department recognizes that whether a property is a replacement property is a factual determination which must take into account factors other than size.

Reasons: According to the definition of replacement property, a property will only qualify as a replacement property if it is reasonable to conclude that it was acquired to replace the former business property.

Technical Interpretation - External

24 June 1999 External T.I. 9917535 - INTEREST TO BUY COMMON SHARES- LUDCO CASE

Unedited CRA Tags
20(1)(c)

Principal Issues: Comments on Ludco case - will the Department change its position re: deductibility of interest on funds borrowed to buy common shares

Position: No

Reasons: Special circumstances in Ludco

23 June 1999 External T.I. 9830985 F - USUFRUIT VS FIDUCIE AU CONJOINT AVANT 72

Unedited CRA Tags
248(3) 108(1) 104(4.1)

Principales Questions: fiducie testamentaire vs usufruit

Position Adoptée: question de faits

22 June 1999 External T.I. 9911375 - HOUSING PROJECTS

Unedited CRA Tags
130.1(6)(f)(i)

Principal Issues:

Will a loan to a strata condominium corporation be a debt secured on property "included within a housing project" for the purpose of subparagraph 130.1(6)(f)(i) of the Act?

Position:

Based on our general understanding that a strata corporation would hold title to the land and exterior of the condominium building if that property could be used as security then it should qualify.

Reasons:

22 June 1999 External T.I. 9906675 - COOPERATIVE CORPORATIONS

Unedited CRA Tags
136(2)

Principal Issues:
Whether a taxable benefit arises to a shareholder of a corporation that develops and operates a resort for owners of recreation vehicles where the shareholders have the right to use the resort.

Position:
General comments only since we do not have all the facts. It is not clear if the writer wants the corporation to be a cooperative corporation as defined in subsection 136(2) of the Act. It is also a question of fact as to whether a benefit is conferred on a shareholder but it does appear that subsection 15(1) of the Act would apply.

Reasons:
The law.

21 June 1999 External T.I. 9829395 F - PRODUIT POLICE ASSURANCE INVALIDITE

Unedited CRA Tags
70(5.3)

Principales Questions: Quel est l’impact fiscal du produit d’une police d’assurance invalidité sur la valeur des actions d’une société lorsque la société est bénéficiaire de l’assurance?

Position Adoptée: La Direction des décisions ne se prononce pas sur les questions d'interprétation concernant les principes d'évaluation d'actions de société. Nous vous suggérons d’adresser vos questions à la section de l'évaluation du bureau des services fiscaux de votre région.

21 June 1999 External T.I. 9911515 - REPLACEMENT PROPERTY

Unedited CRA Tags
44(1) 110.6

Principal Issues: Can a corporate taxpayer who has disposed of a former business property that is farm land replace the property with shares of a qualified farm corporation that owns farm land and claim the deferral in subsection 44(1) of the Act?

Can a corporate taxpayer that has disposed of farm land that is a former business property obtain a replacement property by purchasing the shares of a qualified farm corporation and obtaining the farm property by winding-up the corporation pursuant to section 88 of the Act.

Position: No.
Yes

Reasons: The shares cannot be said to have been acquired for the purpose of gaining or producing income from the business carried on by the taxpayer as required in paragraph 44(5)(b) of the Act.

21 June 1999 External T.I. 9909465 F - CATÉGORIE 6

Unedited CRA Tags
annexe ii

Principales Questions: Un édifice construit en tôle galvanisée pour entreposer de la pâte à papier est-il visé au sous-alinéa a)(vii) de la catégorie 6 du Règlement?

Position Adoptée: Un édifice en tôle galvanisée utilisé pour entreposer de la pâte à papier serait visé au sous-alinéa a)(vii) de la catégorie 6 du Règlement uniquement si cet édifice n’a aucune semelle ni autre genre d’appui en fondation sous le niveau du sol et la question de savoir si un édifice possède une semelle ou un autre genre d’appui en fondation sous le niveau du sol est une question de fait.

17 June 1999 External T.I. 9905255 - SEGREGATED FUNDS AND GUARANTEES

Unedited CRA Tags
138.1

Principal Issues: The income tax treatment of benefits provided to a policyholder in the form of guarantees under a segregated fund policy (on death or maturity).

Position: Question of fact but general comments based on an example are provided which explains the provisions of section 138.1 that will apply to the policyholder.

Reasons: The provisions of section 138.1 provide for this treatment to the policyholder.

17 June 1999 External T.I. 9909075 - REPAYMENT OF POLICY LOANS

Unedited CRA Tags
60(s)

Principal Issues: Whether or not a policy loan is repaid as a consequence of death of the policyholder for the purpose of paragraph 60(s).

Position: Question of fact - but generally would not be considered to be repaid.

Reasons: Normally, where the terms of the policy only provide for a net payment this does not constitute a repayment of the loan.

16 June 1999 External T.I. 9910955 - CONTRIBUTIONS TO PHSP FOR RETIREES

Unedited CRA Tags
6(1)(a)(i)

Principal Issues:
Whether retired employees are subject to tax on benefits derived from former employer's contribution to a private health services plan

Position:
Not subject to tax. They are treated the same as current employees.

Reasons:
Similar position taken on prior cases

16 June 1999 External T.I. 9916555 F - REEE - CONTENU ÉTRANGER

Unedited CRA Tags
206

Position Adoptée:
Non.

16 June 1999 External T.I. 9824635 F - TRANSFERT DE BIEN À UNE SOCIÉTÉ

Unedited CRA Tags
74.4(2) 74.5(5)

Principal Issues:
Est-ce que le paragraphe 74.4(2) peut s'appliquer à l'égard d'un petit-fils ou une petite-fille à naître et non encore conçu?

Position:
Oui

Reasons:
Il est possible qu'un des principaux objets d'un transfert de bien par une particulier consiste à avantager un petit-fils ou une petite-fille qui n'existe pas au moment du transfert. Question de faits.

15 June 1999 External T.I. 9902745 F - COOPÉRATIVE DE TRAVAILLEURS

Unedited CRA Tags
136(2) 135 Reg 4901(2)

Principales Questions:
1. Est-ce que les coopératives de travailleurs sont des sociétés coopérative au sens du paragraphe 136(2) de la Loi?
2. L'alinéa 15(2.4)c) de la Loi peut-il s'appliquer à une coopérative de travailleurs qui consent un prêt à ses employés pour acquérir des parts de la coopérative ou des actions d'une société liée?

15 June 1999 External T.I. 9903035 - WITHHOLDING TAX

Unedited CRA Tags
212(1)(b)(vii)

Principal Issues:
1. To confirm the tax consequences of 212(13.1)(b) in relation to 212(1)(b)(vii) in a specific situation.
2. Does the Department’s administrative position with respect to the look-through of the partnership for tax convention purposes would apply in such a situation.

Position:
1. The conditions of 212(1)(b)(vii) must be met by the partnership and not the investors.
2. The Department’s administrative position would not apply in such a situation.

Reasons:
Dispositions of the tax statute. It is a question of fact whether or not a corporation and a partnership deal at arm's length.

10 June 1999 External T.I. 9905205 - QUALIFIED FARM PROPERTY- ACQUIRED BY A TRUST

Unedited CRA Tags
110.6 104(21.2) 70(10(a) 252(1)

Principal Issues: Does a trust (whose beneficiaries are grandchildren of a former 50% owner and grandnieces,and grandnephews of the other 50% former owner) owning farm property (now being rented) acquired from the sister and daughter of the prior owners qualify for the enhanced capital gain exemption ?

Position: Question of fact but it appears they do not qualify

Reasons: Use test and Ownership test in 110.6 Definition of parent

9 June 1999 External T.I. 9913805 - MOVING AND PRE BUSINESS EXPENSES

Unedited CRA Tags
62

Principal Issues:
An accountant has requested an interpretation of the deductibility and/or capital treatment of costs incurred prior to purchase of a farming business.

7 June 1999 External T.I. 9907935 - FOREIGN DOLLAR REPORTING

Unedited CRA Tags
3 9(1)

Principal Issues:
1) Can a Canadian company which does all its business in the US report it income on its Canadian income tax return using US dollars ?
2) Can a Canadian company which does all its business in US dollars keep its books and records in Us dollars ?

Position:
1) N0
2) No legislative requirement that books be kept in Canadian dollars but GAAP would probably require it as transactions must be converted.

Reasons:
1) Income as used in section 3 means Canadian dollars and Gaynor v The Queen (91 DTC 5288) confirms that an amount is expressed in canadian currency.
2) No legislative reference but IT-95R discussed accounting method, GAAP would also require the foreign currency be translated and reported in the currency of the country the corporation reports to. It would follow that the actual keeping of the books and records in the reporting currency is the less complicated method of doing business.

4 June 1999 External T.I. 9907505 - APPLICATION OF 118.1(16)

Unedited CRA Tags
118.1(16)

Principal Issues: Application of subsection 118.1(16) to a particular situation.

Position: No opinion provided.

Reasons: Application of this provision is a question of fact and can only be determined with a review of all relevant facts.

31 May 1999 External T.I. 9821335 - FLEXIBLE BENEFIT PLAN - GENERAL ISSUES

Unedited CRA Tags
6(1)(a) 248

Principal Issues: Whether a flexible benefit plan meets the conditions set by the Department so that the various benefit components under the plan are subject to specific provisions of the Act in the same manner as if they were offered on their own outside of the program. One of the benefits is a health care spending account (HCSA).

Position: Cannot rule as insufficient information provided. However, some general comments given.

Reasons: In order for benefits under a HCSA to qualify as tax-free, an employee should not have to forego any of his or her current salary or wages to buy coverage under the plan. In this regard, paragraph 9 of IT-529 states that the conversion of any portion of the employee’s salary to flex credits will result in an income inclusion of the amount of salary so converted. On the other hand, the bulletin states that when a contract of employment is renegotiated upon the expiration of a former employment contract to incorporate a flex plan which offers a choice between a decrease in the level of salary or wages over the term of the new contract in exchange for additional flex credits, the additional credits will not be required to be included in the employee’s income as part of salary and wages.

10 May 1999 External T.I. 9823605 - DISTRIBUTIONS FROM TRUST - 107(4.1)

Unedited CRA Tags
107(4.1) 104(6)

Principal Issues:
Where property is distributed from a trust such that 107(4.1) applies, does 104(6)(b)(i)(B) apply so as to deny the trust a deduction with respect to capital gains that arise on the disposition? (There is a presumption that the capital gains could otherwise be allocated to the beneficiary who received the property that triggered the gain. Also, 75(2) is no longer applicable in the assumed facts of the hypothetical scenario.)

Position:
No.

Reasons:
A teleological interpretation of 104(6)(b)(i)(B) as it interacts with 107(4.1) would take into consideration that 107(4.1) merely employs the rules of 107(4). The restriction in 104(6)(b)(i)(B) with respect to amounts included in income by virtue of 107(4) is intended to deny a deduction by a trust for amounts distributed to a post-1971 spouse trust under certain circumstances. There is no reason to deny a deduction to a trust for gains required to be recognized by virtue of 107(4.1). It is reasonable to consider the gain to be payable to the beneficiary since the beneficiary will receive the property on which the trust will recognize a capital gain.

19 April 1999 External T.I. 9820315 - STOP-LOSS CIF PROVISION

Unedited CRA Tags
112(3) 112(3.32)

Position:
Yes.

13 April 1999 External T.I. 9904855 - TAXABLE BENEFIT - XXXXXXXXXX

Unedited CRA Tags
6(1)(a) 5(1)

Principal Issues:
Whether XXXXXXXXXX would be a taxable benefit pursuant to paragraph 6(1)(a) of the Act.

Position:
Whether or not the definitions of "employee" or "office", as defined in subsection 248(1) of the Act, apply to XXXXXXXXXX is a question of fact, which can only be resolved after a review of the relevant documentation and circumstances. However, the Department maintains its position that the fair market value of XXXXXXXXXX given to a select group of former employees or officers would be a taxable benefit pursuant to paragraph 6(1)(a) of the Act.

Reasons: Similar position taken in other files

18 February 1999 External T.I. 9825635 - VALIDITY OF 104(5.3) ELECTION

Unedited CRA Tags
104(5.3)

Principal Issues:

1. Was the subsection 104(5.3) election valid?
2. If an election was not valid, can it be disregarded?
3. What is the effect of subsection 107(2) with respect to distributions after Jan.1/99?

Position:

1. It may very well have been valid.
2. It is not evident that the election was not valid, so the appropriate course of action may be to have the election considered for revocation under the “fairness” provisions.
3. Where an election was filed under subsection 104(5.3) after February 1995, paragraph 104(5.3)(b) states that subsection 107(2) does not apply to any distribution made “during the period” which ends, at the latest, on January 1, 1999. At the end of that period, subsection 104(4) will deem the trust to have disposed of each property described therein for proceeds equal to its fair market value and to have reacquired it for that same amount. Thus, except as provided for in paragraph 104(5.3)(b), it is not possible to avoid a fair market value realization.

Reasons:

16 February 1999 External T.I. 9732005 - TRUST - ADDITION OF REDEMPTION RIGHT

Unedited CRA Tags
108(2)(a) 108(2)(b)
no disposition on addition of retraction right

Principal Issues:

Technical Interpretation - Internal

23 June 1999 Internal T.I. 9824657 F - ACDI - AIDE PROD. CINÉMATOGRAPHIQUE

Unedited CRA Tags
125.4 12(1)(X)

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.

22 June 1999 Internal T.I. 9912437 - PAYMENTS FOR PEOPLE WITH DISABILITIES

Unedited CRA Tags
118.5(1) 56(1)(n) 63(3) 118.2(2)

Principal Issues:

Further questions regarding our response of 7-990470 concerning taxation of various types of payments made to disabled individuals or parents of disabled children under the Employability Assistance for People with Disabilities (EAPD) Program and the Family Support (FS) Program. Both programs are administered by the province of Prince Edward Island.

Position:

1) Payment for tuition and training costs under EAPD Program for disabled individual is taxable under 56(1)(n)
2) Payment or reimbursement for medical expenses for disabled child under FS Program is not taxable
3) Payment or reimbursement for child care expenses for disabled child under FS Program is not taxable

Reasons:

22 June 1999 Internal T.I. 9603687 - INDIAN, RRSPS, T1-OVP

Unedited CRA Tags
146(8) 146(8.2) 81(1)(a) 204.1 220(3.1)

Principal Issues:

18 June 1999 Internal T.I. 9910827 F - ABANDON D'UN CAAF

Unedited CRA Tags
13(21)

Principales Questions: Un CAAF est-il un avoir forestier?

Position Adoptée: oui

17 June 1999 Internal T.I. 9830837 F - PENSION ALLIMENTAIRE

Unedited CRA Tags
56.1(4)

Principales Questions:
Une entente temporaire signée en septembre 1998 vise des paiements de pension alimentaire faits pour la période de juin 1996 à décembre 1997. Le 1er janvier 1998, l’ordonnance de 1992 revient en vigueur et les paiements sont faits en vertu de cette ordonnance. Est-ce que les nouvelles règles de pension alimentaire s’appliquent aux montants versés à partir de janvier 1998 ?

Position Adoptée:
Non.

16 June 1999 Internal T.I. 9820677 F - DÉFINITION DU MOT STRUCTURE

Unedited CRA Tags
annexe II

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.

14 June 1999 Internal T.I. 9903747 - MINIMUM TAX AND HEALTH AND WELFARE TRUST

Unedited CRA Tags
127.52(h.1) 127.52 127.53(1)(c)

Principal Issues: Are the minimum tax provisions applicable to a Health and Welfare trust?

Position: YES

Reasons: 127.53(1) does not provide a basic exemption

7 June 1999 Internal T.I. 9907157 - SAFE INCOME ON HAND

Unedited CRA Tags
55(2) 55(5)(b)

Principal Issues: several issues relating to the claculation of safe income

Position: see response

Reasons: see response

2 June 1999 Internal T.I. 9908997 - MEDICAL EXPENSE - SHARK TREATMENT IN MEXICO

Unedited CRA Tags
118.2(2)(a) 118.2(2)(h) 118.2(2)(n)

Principal Issues: Whether the cost of a trip to Mexico for a medical treatment using shark fins and cartilage qualifies as a medical expense.

Position: Question of fact.

Reasons: The cost can likely be broken down into three separate items: (1) a payment to a licensed medical clinic; (2) the cost of shark fins and cartilage and (3) travel expenses. (1) Where fees for medical treatments are paid to a private clinic, the fees would not qualify as a medical expense under paragraph 118.2(2)(a) of the Act unless the clinic qualified as a “licensed private hospital.” Whether a particular clinic is a licensed private hospital is a question of fact, which can only be determined after reviewing the relevant documentation and related legislation. (2) In general terms, the cost of shark fins and cartilage used in a medical procedure would qualify as a medical expense under paragraph 118.2(2)(n) if the use of these substances by the patient is prescribed by a medical practitioner (see paragraph 4 of IT-519R2) and if they are dispensed by a licensed pharmacist who records the prescription and issues a proper receipt. (3) Paragraph 118.2(2)(h) provides for the inclusion of certain travel expenses as medical expenses. The travel expenses must have been incurred in travelling to a place to obtain medical services for a patient who is the taxpayer, his spouse or a dependant, and, where the patient was, and has been certified by a medical practitioner to be, incapable of travelling without the assistance of an attendant, in respect of one individual who accompanied the patient. The travel expenses must be reasonable in amount and it must be reasonable, having regard to the circumstances, for the patient to travel to that particular place to obtain the medical services. Further, the patient must have travelled not less than 80 kilometres, in a reasonably direct route, to obtain the medical services and substantially equivalent services must not have been available in the locality where the patient dwells. It is our view that the taxpayer must have had an existing medical condition or illness and the services must have been performed by health professionals or related institutions. While there is no requirement that the health professional or related institution be licensed, it is our view that this would generally be the case.

28 May 1999 Internal T.I. 9830907 F - DGC - VENTE DE PIERRE

Unedited CRA Tags
110.6(1) 110.6(2)

Principales Questions:
Est-ce que le contribuable peut réclamer la déduction pour gains en capital - biens agricoles admissibles en vertu du paragraphe 110.6(2) de la Loi à l’égard du gain en capital réalisé sur la vente de pierre après le transfert des terres agricoles à son fils ?

Position Adoptée:
Non.

31 March 1999 Internal T.I. 9902567 - SHAREHOLDER'S LOANS

Unedited CRA Tags
15(2)

Principal Issues:
Paragraph 27 of IT-119R4 indicates that repayments are considered to apply first to the oldest loan or debt outstanding (first-in, first-out basis) unless the facts clearly indicate otherwise. On the other hand, paragraph 36 includes an example of a running shareholder’s loan account which indicates that credits are applied on a FIFO basis unless specific allocation of the credit is requested by the debtor. XXXXXXXXXX Is the position in paragraph 36 relevant where a taxpayer does not wish to follow FIFO because a portion of a loan account was not included in a shareholder’s income (statute-barred years)?

Position: XXXXXXXXXX

Reasons: Refer to the Position.

12 February 1999 Internal T.I. 9832697 - ADMINISTRATIVE FEES

Unedited CRA Tags
8(1)(b) 60(o.1)

Principal Issues: Are the ‘administration fees’ paid by an employer pursuant to paragraph 65(1.2)(b) of the Employment Standards Act (ESA) of Ontario considered a reimbursement of the employee's legal fees?

Position: No.

Reasons: The amount is a charge to the employer based on a percentage of the wages awarded to the employee. The amount is not based on legal services provided to the employee and is in the nature of a penalty to the employer. The former wording of the ESA used the term penalty, rather than administrative costs, regarding this amount. In addition, if the amount were a payment by the employer for administrative costs incurred, the amount would have to be apportioned between the employer and employee for their respective share of the costs.

Ministerial Letter

9 June 1999 Ministerial Letter 9910718 F - FAMILLE D'ACCUEIL ET RÉSIDENCE D'ACCUEIL

Unedited CRA Tags
81(1)h)

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

Monsieur le Député,

8 June 1999 Ministerial Letter 9910508 - INTEREST ON RETROACTIVE WCB PAYMENTS

Unedited CRA Tags
12(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.

June 8, 1999

XXXXXXXXXX

Dear XXXXXXXXXX:

28 May 1999 Ministerial Letter 9907588 - EMPLOYMENT INCOME

Unedited CRA Tags
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.

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Dear XXXXXXXXXX: