Income Tax Severed Letters - 2008-10-31

Ruling

2008 Ruling 2007-0251731R3 - Partnership Reorganization

Unedited CRA Tags
125(7) 256(2.1)

Principal Issues: Where a partner of a professional partnership creates a professional corporation through which professional services will be provided to the partnership, will the corporation be eligible for the small business deduction?

Position: Question of fact. Generally yes, if certain conditions are met.

Reasons: Reading of relevant legislation and consistent with other rulings

2008 Ruling 2008-0273481R3 - Partnership Reorg -Personal Service Business

Unedited CRA Tags
125(7)("personal services business") 125(7)("specified partnership income") 256(2.1)

Principal Issues: Where a partner of a professional partnership creates a professional corporation through which professional services will be provided to the partnership, will the corporation be eligible for the small business deduction?

Position: Question of fact. Generally, yes, if certain conditions are met.

Reasons: Reading of relevant legislation and consistent with other rulings.

Technical Interpretation - External

24 October 2008 External T.I. 2008-0278661E5 F - Allocation pour frais de déplacement

Unedited CRA Tags
6(1)b)
travel to cover “a very great distance” between the employee’s regular work place and the employer’s place of business (a hotel meeting room) is in the course of the employment

Principales Questions: (1) Les allocations pour frais de déplacement reçues par un employé pour parcourir une très longue distance entre son lieu de travail et la principale place d'affaires de son employeur pour assister à des réunions occasionnelles sont-elles imposables?
(2) Les allocations pour frais de déplacement reçues par un employé pour parcourir une très longue distance entre la place d'affaires d'un client et la place d'affaires de l'employeur pour assister à des réunions occasionnelles sont-elles imposables?
(3) Est-ce que la réponse de l'ARC serait la même si les réunions avaient lieu ailleurs qu'à la place d'affaires de l'employeur, comme dans la salle de réunion d'un hôtel?

Position Adoptée: (1) Non.
(2) Non.
(3) La position de l'ARC est la même que les réunions aient lieu au siège social de l'employeur ou à l'extérieur, comme dans la salle de réunion d'un hôtel.

Raisons: Positions administratives de l'ARC.

XXXXXXXXXX 2008-027866
Julie Racette
Le 24 octobre 2008

23 October 2008 External T.I. 2008-0285981E5 - Stem cell therapy received overseas and METC

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

Principal Issues: Will the cost of stem cell therapy in the XXXXXXXXXX , including the travel expenses, qualify for the medical expense tax credit.

Position: Question of fact, but likely yes.

Reasons: Amounts paid to a medical practitioner or a licensed private hospital qualify as a medical expense under paragraph 118.2(2)(a) of the Act. Also, transportation expenses to travel not less than 40 km to obtain medical services qualify under paragraph 118.2(2)(g) of the Act and other travel expenses qualify under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 km to obtain medical services and it is reasonable for the individual to have done so, the route taken was reasonably direct and substantially equivalent medical services were not available in the individual's locality.

22 October 2008 External T.I. 2008-0278561E5 - Deductibility of estimated business expenses

Unedited CRA Tags
18(1)(a) 67.1

Principal Issues: Can the taxpayer deduct an amount for meals or other out of pocket expenses in computing income from a business based on the per deim amounts received?

Position: No. The deduction must be based on the amounts actually expended.

Reasons: The law.

22 October 2008 External T.I. 2008-0268651E5 - Taxability of Amounts Received For Future Repairs

Unedited CRA Tags
149(1)(l)

Principal Issues: How should amounts received by a co-operative housing corporation from its member/shareholders for the purpose of making future major repairs and replacements to the particular residential property be treated for tax purposes?

Position: General comments only - However, amounts are not likely taxable.

Reasons: Paragraph 3 of IT-304R2.

XXXXXXXXXX Michael Cooke
2008-026865
October 22, 2008

21 October 2008 External T.I. 2008-0292471E5 - Overseas Employment Tax Credit

Unedited CRA Tags
122.3

Principal Issues: Whether employment income earned by an individual through a Canadian resident corporation in which the individual is the sole shareholder and its only employee qualifies for the OETC.

Position: Depends on whether the individual would, but for the existence of the corporation, reasonably be regarded as an employee of a person or partnership that is not a specified employer.

Reasons: Subsection 122.3(1.1)

20 October 2008 External T.I. 2008-0280221E5 - Travel to/from a remote work location

Unedited CRA Tags
6(6)(b)(ii)

Principal Issues: Can an allowance that is paid by an employer to its employees for the costs incurred for travel between an employee's home and a central departure point be excluded from income under subparagraph 6(6)(b)(ii) of the Act?

Position: Question of fact - but provided allowance or benefit is reasonable - yes.

Reasons: The law.

17 October 2008 External T.I. 2008-0295261E5 - Deferred Salary Leave Plan - Retiring After Leave

Unedited CRA Tags
ITR 6801(a)

Principal Issues: What are the tax consequences if an employee retires after a period of leave under a DSLP?

Position: The arrangement would cease to be a DSLP at the time the conditions in paragraph 6801(a) are not met with the result that any unpaid deferred salary would be included in the employee's income at that time

Reasons: Paragraph 6801(a) of the Regulations requires a DSLP provide that a participant return to work following their leave of absence.

17 October 2008 External T.I. 2008-0278501E5 - Taxable Benefits

Unedited CRA Tags
6(1)(a) 248(1) 6(1)(f) 6(4)

Principal Issues: Various questions concerning how the wage loss replacement plan benefits and life insurance proceeds would be taxed.

Position: General information provided. However, generally life insurance proceeds would not be subject to tax when received by a beneficiary if they are received as a consequence of the death of the insured individual.

Reasons: The law.

16 October 2008 External T.I. 2008-0285941E5 - Retiring allowance

Unedited CRA Tags
248(1) 56(1)(a)(ii) 6(3)

Principal Issues: Whether a lump sum payment made to a senior executive on termination constitutes employment income or a retiring allowance?

Position: Question of fact, only general comments provided.

Reasons: Wording of the legislation. Also, since this is a completed transaction involving a specific taxpayer, the taxpayer should submit all relevant information and documentation to the appropriate tax services office for a determination.

16 October 2008 External T.I. 2007-0262931E5 - Mortgage fees

Unedited CRA Tags
12(1)(b) 20(1)(p)

Principal Issues: Timing of reporting of mortgage fees.

Position: General comments provided.

Reasons: Factual determination.

Technical Interpretation - Internal

20 October 2008 Internal T.I. 2008-0296611I7 - Christian Science practitioner

Unedited CRA Tags
118.2(2)

Principal Issues: Whether a Christian Science practitioner qualifies as a medical practitioner for purposes of section 118.2(2) of the Income Tax Act

Position: No

Reasons: We are not aware of any province or territory that currently authorizes Christian Science practitioners to practice as medical practitioners. Paragraph 3 of IT-519 will be revised to clarify our position.